Question 4 and 5 purchasing management

Question 4 (20 Marks) ABC inventory classification is used in inventory management to assist with finding the most essential products in their group and make sure these are well managed above those less valuable. This classification is based on the theory that all inventory is not of equal value. It follows the Pareto Principle, where 20% of inventory accounts for 80% of the value to the organisation. Use the above statement and the information in the table below to show how the food manufacturing company's Stationery department can classify its inventory using the annual consumption value. The food manufacturing company's Stationery business as the example: Question 5 (20 marks) Purchased goods must be transported from the point where they are grown, or manufactured to the place where they are needed. Fully discuss any six factors to be considered when selecting mode of shipment, carrier and routing. Use the relevant examples from the food manufacturing company. (12 marks) Give four reasons why the selection of the FOB point is important to the food manufacturing company as a purchaser. ( 8 marks)