Question 5 (20 marks) 5.1 The accountant for one of the PepsiCo factories in Palapye has provided you a list with six items in inventory along with their unit costs and annual demand in units. He has requested that you should assist him apply the ABC analysis to determine which item(s) should be carefully controlled using a quantitative inventory technique and which item(s) should not be closely controlled. Code Unit Cost (R) (10 marks) Annual Demand XX1 5.84 1,200 B66 5.40 1,110 3CPO 1.12 896 33CP 74.54 1,104 R2D2 2.00 1,110 RMS 2.08 961 5.2 In addition, this same factory shop uses 10 brackets per day during the year. The brackets are purchased from a supplier 90km away. The costs incurred include holding costs per bracket per year: R1.50, order cost per order: R18.75, Lead time is 2 days, working days per year is 250 days. What would be the economic order quantity? The annual inventory holding costs. How many orders would be made each year? What would be the annual order cost? What is the time (10 marks) between orders and the reorder point (ROP)? THE END Question 3 (20 marks) 1 PepsiCo is contemplating locating its state-of-the-art factory in any of these three sites Durban (A), Bulawayo (B) and Gaborone (C). The goal is to locate the factory at a minimum cost site, where cost is measured by annual fixed plus variable costs of production. The following information has been presented to you, SITE A ANNUALISED FIXED COST VARIABLE COST PER PRODUCT PRODUCED R10,000,000 R20,000,000 R25,000,000 R2,500 R2,000 R1,000 PepsiCo knows that it will produce between 0 and 60 000 units at the new plant each year, but this is the available knowledge regarding its production plans thus far. Provide advice using a relevant diagram on what values of volume of production if any is site C a recommended site? What volume indicates site A is optimal and over what range of volume is site B optimal and why. (Show all necessary calculations in your report).