Mr Chibisa runs the cafeteria at LAMAU. He has been having problems managing the business and is making losses. During a brief encounter, you recommend that he should try managing his costs Having found out that you are a commerce student at the institution and this semester you are studying cost accounting, Mr Chibisa suggests you would be perfect for Job. QUESTION ONE One of the first things you first notice upon assessing the business is the uneconomic. way in which it is run. There was little effort made to keep costs low or reasonable in the business. Assuming Mr Chibisa practices Just-In-Time (JIT) for all fresh raw materials and keeps buffer stock for work-in-progress materials:- a) Discuss the concept of 'Just-In-Time (JIT) for all fresh raw materials' of raw materials and 'buffer stock for work-in-progress (10 marks) b) Assuming for the past year Mr Chibisa has collected the following information on the bulky products he stores. Calculate the economic order quantity of maize flour I rice? (10 marks) "make assumptions where necessary *Please note that the information in this table will also be used in other questions Daily statistics Maximum Usage Average Usage Minimum Usage Maximum lead time: Average lead time Minimum lead time Ordering costs Holding costs Maize Flour (50 kg Bags) 1 0.75 0.5 5 3.5 2 Mk 7,200 Mk 40 Rice (50 kg Bags). 0.5 0.35 0.2 7 4 1 Mk15,500 Mk 65