Based on the information provided below, answer questions $1$ and $2$ below.

Modem Business Hardware Enterpriso $($MBHE$)$ is a prominent retailer of electronic devices and systems, operating in a Southem Alrican country. In a bid to reassess its stratogic direction, MBHE recently engaged an operations management consultant to evaluate its operations strategy. The consultant's report highlighted amonig others the following critical insight:

While MBHE's historical approach, characterised by a top$-$down, externally neutral stance and a focus on operational proactivity, has served its purpose over the past five years, it is now inadequate to address the evolving competitive landscape. With the emergence of innovative and technologically adept competitors, MBHE's management is urged to pivot towards a next$-$level operations strategy. This new integrated approach should leverage MBHE's operational resources to their fullest potential, aligning closely with market demands and drawing upon the operational improvements made in recent years. Moreover, MBHE needs to cultivate intemally supportive operations capabilities that seamlessly integrate with its corporate strategy to position the business as a leader in the sector.$\text{'}$

Current inventory policy

MBHE currently applies the Economic Order Quantity $($EOQ$)$ model as an inventory management tool. Among others, MBHE stocks a certain swilch connector at its central warehouse for supplying field service offices. The annual demand for these connectors stands at $60000$ units. MBHE estimates the annual holding cost for this item of inventory to be R$50$ per unit and the cost to place and process an order from the supplier amounts to R$150.$ It operates $300$ days per year and the lead time to receive an order from the supplier is two full working days.

Embracing servitisation

MBHE's management is actively exploring servitisation as a strategic avenue to broaden its competitive offerings. This would entail transitioning from conventional product$-$centric sales to offering holistic solutions to enhance customer value.