Best Bikes produces bicycles and buys brakes from a supplier in Japan. The brake set for one bicycle costs $125, and it is $35 to process the order with the supplier. The company consistently sells 50 bicycles a week (for 52 weeks of the year) and holds an average of 1 week of brake sets in inventory to cover the constant lead time from Japan. The company uses a holding/carrying rate of 20%.
1. What is the average inventory carrying/holding cost for the brakes?