Choc Co is a recently established company in the confectionery business. It has a keen and flexible workforce. It makes a range of organic chocolate bars. Its main customers are supermarkets, petrol stations and newsagents. The purchase patterns o. Choc Co's customers vary slightly. The supermarkets tend to order large amounts at varying times throughout the year. The petrol stations make regular weekly orders for smaller amounts and the newsagents have no regular pattern for their order size or frequency at all. The company's chocolate bars are becoming increasingly popular, with demand peaking at 5,000,000 bars over the last year. The two key ingredients for Choc Co's products are cocoa and sugar. Both of these ingredients are bought from different suppliers. Over the last year, the company has used 100,000 kg of sugar for its production. It currently orders 5,000 kg of sugar at a time, at regular intervals throughout the year. The cost of placing an order is RM35 and the cost of storing 1 kg of sugar is RMO-20 per annum, Choc Co does not hold any safety inventories of sugar since it has always found its supplier to be very quick and reliable when Choc Co places an order. Cocoa is the more expensive of the two ingredients; therefore Choc Co's purchasing policy in relation to this has already been established. It is bought from a very reliable supplier with whom it has good relationships. The current ordering policy for cocoa (i.e. total ordering and holding costs) costs the company in the region of RM10,000 per annum. 2 Required: a. Calculate the annual cost of the current ordering policy for sugar. (3 marks) b. Calculate the annual cost if the economic order quantity is used to determine the optimum order size for sugar. (4 marks) c. Explain how a just-in-time system for inventory procurement works and its effect on inventory levels. Briefly discuss whether or not it would be suitable for Choc Co's business. (6 marks)