Inventory Cost H=hC To summarize, the costs that must be considered in any lot sizing decision are as follows Average price per unit purchased, S C/unit Fixed ordering cost incurred per lot, $S/lot Holding cost incurred per unit per year, $h/unit/year hCInventory Cost H=hC To summarize, the costs that must be considered in any lot sizing decision are as follows: Average price per unit purchased, $C/unit Fixed ordering cost incurred per lot, $S/lot Holding cost incurred per unit per year, $h/unit/year = hC