QUESTION 2 You are being considered as the operations manager for a transport company in charge of vehicle maintenance. The nature of your operations, involves working with a very wide range of spures and consumables in addition to very huge quantities of same. Before your appointment as the operations manager, the practice was to keep huye quantities of almost all kinds of spares just to ensure the maintenance repair works flowed without due cognizance of the consequential effects of cost of holding stock. The practice have the consequence of huge expenditure from your outfit to the extent that your company was literally starved for financial resources for other activities The root cause of these problems was attributed to the acting operations manager who though was a skilled technician had a poor managerial background, In your appointment as the new operations manager, you will have responsibility for prudent expenditure of resources and at the same time ensuring ellicient maintenance/repair and quick turnaround of vehicles in the maintenance shop within the constraint ofa tight budget. A recommendation by an expert who did an evaluation of the inventory management situation of your company before your appointment was the adoption of the ABC inventory control approach. Al your interview, you are to; a) Explain the ABC inventory control approach to managing inventory, (4 marks) b) Explain usage value and the ways in which it is used to categorize inventory using the ABC approach with an example. (16 marks) c) Explain the following inventory replenishment systems; 1. The fixed point system and ii. The periodic review system? (5 mark each) 3) Explain the economic order quantity (EOQ) and its impact on cost of operations. (10 marks)