Type of cost Description Ordering cost Since an order is placed, we incur an ordering cost of $80. Holding cost Since we receive the ordered quantity of 75 units in full at the beginning of June, the inventory level at the beginning of June would be 75 units. The inventory level at the end of June would be 0 units. So, the average inventory level in June would be 75 +0 2 =37.5 units The total holding cost for month of June would therefore, be =(37.5)