Star Manufacturing Company (Star) manufactures different types of home appliances. The Plant Manager believes that a JIT Production System can bring significant benefit to the company. He is considering implementing JIT production for the food processor business line operating at the company's Shenzhen Plant. As you are asked to evaluate the proposal by comparing b adopted. You have collected the following estimates after a discussion with the Plant Manager the management accountant of Star enefit and cost if JIT production is Annual cost for JIT production implementation would be $500,000 S3,000,000 80% of the current level of $600,000 achieved from the JIT production system. Star currently incurs $200,000 in 1. 2. Average inventory would decline by 80% from the current level of 3. The expected savings from insurance, space, warehousing costs would be 4. Rework costs would be reduced by 20% due to quality improvement annual rework costs. 5. The existing annual sales of the food processor are 100,000 units at selling price $2,000 each. Improved product quality under JIT production would enable Star to deliver better value to customers in a speedy manner. The company is able to charge a higher price of $2,005 per unit. However, to prevent any lost sales due to stockouts, an incremental cost of $100,000 in overtime premiums is expected to incur each year Star's required rate of return on inventory investment is 15% per year Required a) From a financial perspective, should Star implement JIT production at (9 marks) its Shenzhen Plant? Explain. b) Name five nonfinancial and qualitative factors Star should consider (5 marks) when making the decision to adopt JIT production c) Suppose Star has implemented JIT production at its Shenzhen Plant. (6 marks) Give six examples of the performance measures (financial and non- financial) that Star could use to evaluate and control JIT production