Annual demand for your product is 50,000 units. Holding cost is 25% of the value of the item. The cost, per unit, is $5.00. It costs $200 to place an order. This is a new supplier that you are thinking about buying from, and the catch is that you have to place a pretty big order in order to be able to buy from these people. You have to buy at least 6957 units every time.
What are you total costs, (including the Cost of Goods), if you choose to buy from this supplier?