5.1 The accountant for one of the PepsiCo factories in Palapye has provided you a list with six items in inventory along with their unit costs and annual demand in units. He has requested that you should assist him apply the ABC analysis to determine which item(s) should be carefully controlled using a quantitative inventory technique and which item(s) should not be closely controlled. (10 marks)

Code Unit Cost (R) Annual Demand

XX1 5.84 1200

B66 5.40 1110

3CPO 1.12 896

33CP 74.54 1104

R2D2 2.00 1110

RMS 2.08 961

5.2 In addition, this same factory shop uses 10 brackets per day during the year. The brackets are purchased from a supplier 90km away. The costs incurred include holding costs per bracket per year: R1.50, order cost per order: R18.75, Lead time is 2 days, working days per year is 250 days. What would be the economic order quantity? What will be the annual inventory holding costs. How many orders would be made each year? What would be the annual order cost? What is the time between orders and the reorder point (ROP)?