Some Key Costs: Average price paid per unit purchased:The price paid per unit is referred to as the materia/cost and is denoted by C.It is measured in $/unit. Fixed ordering cost:all costs that do not vary with the size of the order but are incurred each time an order is placed(denoted by S and measured in $/lot) Transportation,labor costs. Ho/ding cost is the cost of carrying one unit in inventory for a specified period of time,usually one year(denoted by Hand is measured in $/unit/year) Holding cost fraction h:H=hC SEIEE AU406 10-9+ - SEIEE AU406  Average price paid per unit purchased: The price paid per unit is referred to as the material cost and is denoted by C. It is measured in $/unit.  Fixed ordering cost: all costs that do not vary with the size of the order but are incurred each time an order is placed(denoted by S and measured in $/lot)  Transportation, labor costs.  Holding cost is the cost of carrying one unit in inventory for a specified period of time, usually one year(denoted by H and is measured in $/unit/year)  Holding cost fraction h: H=hC 10-9 Some Key Costs: