Pork Bellies is considering manufacturing ready-made meals in the new processing plant. The company is planning on working 250 working days per year and has devised the following estimates on sales of the new product:

Daily Sales Probability 400 0.5 500 0.3 600 0.1 700 0.1 . The annual carrying cost per unit is $0.40 . Set-up time to manufacture the meals is 20 minutes for each of the 5 machines involved in preparing the meals and it costs $24.50 per hour for operators to set the machines up. . Manufacturing overhead is charged out at a rate of $12.50 per machine hour. . The ready-made meals are packaged in recyclable containers and cost $3.00 per 10 pack. The containers are sourced from Western Australia and can take anywhere between 15 to 20 days to arrive and have the following probability estimates:\f20 0.10 Required: 1. Calculate the economic size for each production run [3 marks} 2. Ivhl'hen should an order for more containers be placed, based on expected values? {3 marks} 3. How can ordering he handled to eliminate stock-outs 9 out of 111} times without holding large amounts of containers? [4 marks} 4. Explain the differences in the basic philospophies underlying the J IT and EDQ approaches to inventory}' management [5 marks}