QUESTION 2: Inventory management (JIT) and Customer profitability TOTAL [20 marks] McDonalds one of the most popular fast food burger outlets in the world, has successfully implemented a Just in time system (JIT) into its production processes. According to McDonalds, they produce only the products the customer wants, at the rate and quality at which the customer wants them, within a minimum time frame. Inventory Management [5 marks) Based on the statement above, what features of the JIT system do you think have allowed McDonalds to be successful with its JIT implementation? Please list and explain five (5) features of a JIT system that would be relevant to the McDonalds business. Customer Profitability [15 marks) Cubes with Speed is a wholesaler of a large range of speed cubes, puzzles and accessories that supply to a large range of different customers. The business is concerned about increasing costs related to various activities of the business. These concerns include costs relating to administration, associated with processing and invoicing orders to customers and the costs related to distribution of the orders to the customers. The business has decided to investigate costs relating to sales of products to its customers using a simple customer analysis exercise and has identified the following costs related to three (3) of its customers. Total Sales revenue Cost of sales Gross Profit Financial data by customer category Rubik Qan $ 250,000 $160,000S 150,000 88,000 100,000 72,000 QIYI 140,000 $ 77,000 63,000 550,000 315.000 235,000 $ 42.000 83,500 Order processing and invoicing costs based on the number of orders received) Distribution costs based on the number of deliveries madel Sales and marketing costs (based on dollar value of sales Administration costs based on the number of deliveries made 53,500 36,000 Total expenses Profit (less) 215.000 20,000 $ drie 190 Number of orders received and invoiced Number of deliveries made 90 120 60 73 253 1. Calculate the activity cost rate for each activity [2 marks] 1. Assign the activity costs to each of the three (3) customers [4 marks) 2. Calculate the contribution for each customer using the data provided for each customer (sales, cost of goods sold and profit) [4 marks] 3. Rank each customer from best to worst (1 = best to 3 = worst) in terms of profitability for the business. [1 mark] 4. Provide Cubes with Speed with two (2) recommendations as to potential areas of change that could improve relationships with customers and profitability for the business [4 marks)