Chico's Chili (CC) is well known for making the best chili in Chicago. Chico makes a variety of different types of chili and customers can combine it together with any sides they like. Chico's chili is so popular that it uses about 120kgs of ground beef per day and he is open 348 days per year. Chico has been ordering beef once per week and has determined that it takes a 1/2 hour to place an order. His hourly rate is $40. Chico has also determined that inventory spoilage is 1% and his interest rate on debt is 8%. Chico pays $10.00 per kg for his ground beef. The lead time to place a beef order up to delivery is 3 days. Chico has just learned about something called the EOQ and now thinks if he might be able to save money by changing his order pattern. Please calculate the following: NOTE: Show your work; one number answers or answers which do not show the thought process sufficiently will not be graded favourably. 1. Calculate how many kgs Chico purchases in a year (1/2 mark). 2. Calculate Chico's current Order Quantity (1/2 mark). 3. What is the cost of placing one order? (1/2 mark) 4. What is the Carrying Cost of one kg of beef? (1/2 mark) 5. Calculate the current Total Annual Inventory Cost. (2 marks) 6. Calculate Chico's economic order quantity (EOQ). (2 marks) 7. Using the EOQ, recalculate the Total Inventory Annual Costs. (2 marks) 8. What is the annual cost savings if Chico switches to ordering using the EOQ? (1 mark) 9. What is the inventory reorder point? (1 mark)