ABC Ltd, a car manufacturer, aims to produce and sell high-quality cars at reasonable prices but is currently concerned about the storage cost of an engine-related part called UK10, which includes insurance, interest, and space cost. This automotive part is purchased from an outsider supplier semi-annually. The data related to UK10 are as follows. annual usage quantity minimum order quantity cost per unit 12,000 units 1,000 units 3 UK10 is replenished instantly and depleted evenly throughout the year. On average, half of the amount purchased is held in inventory. The cost of storage is 20% of the purchase price. The cost of placing and receiving an order is estimated at 20 per order. REQUIRED: Please note: a maximum word count applies to some parts of this question. (a) What is the primary goal of adopting the economic order quantity (EOQ) system? (3 marks; max 105 words) Define the formula for EOQ and explain why EOQ increases with the cost of ordering while decreases with the cost of holding inventory. (9 marks; max 315 words) The EOQ calculation is based on several assumptions (e.g.. perfect prediction of future demand). Using examples, explain three factors that companies should consider in order to mitigate the potential limitation of this quantitative formula. (9 marks; max 315 words)