1. A company is planning to start the production of a new product. A new machine is being set up that can produce the product at the rate of 200 units per day; 80 units will be used (consumed) daily in assembling the final product; the company operates 5 days per week, 50 weeks per year. The manager has estimated the cost of setting up the new machine at $300 (set-up cost), before production can actually begin. Inventory holding cost is $10 per unit annually. (Hints: Rate of Production (p)=200; Rate of Usage (d)=80; Total Demand=(250)(d), as the company operates for 5 days per week, 50 weeks per day. Use the EPQ model to determine the following: a) The optimal production run quantity; in other words, what is the cost-minimizing level of production for this factory? What is the length of a production run? (Hint: The length of the production run is the Total Quantity Produced/Rate of Production) b) At what rate will inventory accumulate in this factory? 2. Cite and explain TWO advantages of using the ABC Classification System in Inventory Control.