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Task 1 - Inventory Management & Control Frank's Fasteners a leading company based in UK, which makes industrial fasteners has the following average annual inventory level, as given in Table T1a. To have a more proper control over the inventory the company needs to do A-B-C analysis based on the annual consumption value. Item Machine screw Cable clamp Eyebolt Tape measure Nail Carabiner Wing nut Flat washer S hook Annual Number Cost () per of Units Sold Unit 18,000 0.35 10,000 0.50 14,000 1.35 51,000 3.50 14,000 0.90 40,000 1.80 82,000 0.04 121,000 0.06 14,000 0.15 7,000 1.60 Table T1a - Average Annual Inventory Annual Consumption Value () 6,300.00 5,000.00 18,900.00 178,500.00 12,600.00 72,000.00 3,280.00 7,260.00 2,100.00 11,200.00 Ferrule a. Perform A-B-C classification of the inventory and classify the items based on 70-20-10 rule. (10 Marks) b. Prepare a Pareto Chart with the above information. (05 Marks) c. Suggest what type of stocking policy could be adopted for each class of inventory. Justify your answer with sufficient explanation. (05 Marks) d. The ordering costs and the carrying costs of the three classes of inventory are given in Table T1b. Calculate the annual cost of stock of Frank's Fasteners, if the company follows EOQ for ordering the items. Class Carrying Costs (C) Ordering Costs per Order (S) in 2.00 A 10% of Item Cost/Year B 1.50 12% of Item Cost/Year C 1.00 15% of Item Cost/Year Table T1b - Inventory Costs