Consider a hardware supply warehouse that is contractually obligated to deliver 1,000 units of a specialized fastener to a local manufacturing company each week. Each time the warehouse places an order for these items from its supplier, an ordering and transportation fee of $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener and charges the local firm $5.00 for each fastener. Annual holding cost is 25% of inventory value, or $.025 per year. The warehouse manager would like to know how much to order when the inventory gets to zero (Simchi-Levi, Kaminsky, and Smichi-Levi, 2008. Pg. 35).