|
Item Code |
Annual Demand |
Unit Price |
| 4556 | 10000 | $1 |
| 2564 | 52 | $3000 |
| 1289 | 128 | $100 |
| 3265 | 300 | $4 |
| 7896 | 90 | $50 |
| 6842 | 600 | $5 |
| 2589 | 35 | $7000 |
| 8496 | 420 | $7 |
| 3564 | 560 | $3 |
| 8547 | 136 | $28 |
| 7826 | 30 | $5000 |
| 5614 | 85 | $235 |
| 8951 | 450 | $5 |
| 7265 | 76 | $142 |
| 4235 | 100 | $20 |
| 9898 | 2000 | $12 |
| 9542 | 400 | $13 |
| 8474 | 300 | $56 |
| 5454 | 600 | $10 |
| 1236 | 700 | $9 |
The manager wants to use a two-bin inventory system for C items. Which ones of the following items are C items? Use the ABC approach to find out.
Answer:
| Item Code | Annual Demand | Unit Price | total cost= unit cost*annual demand | Percent by cost= cost/total sum cost |
| 4556 | 10000 | $1 | $10,000 | 1.46% |
| 2564 | 52 | $3,000 | $156,000 | 22.80% |
| 1289 | 128 | $100 | $12,800 | 1.87% |
| 3265 | 300 | $4 | $1,200 | 0.18% |
| 7896 | 90 | $50 | $4,500 | 0.66% |
| 6842 | 600 | $5 | $3,000 | 0.44% |
| 2589 | 35 | $7,000 | $245,000 | 35.81% |
| 8496 | 420 | $7 | $2,940 | 0.43% |
| 3564 | 560 | $3 | $1,680 | 0.25% |
| 8547 | 136 | $28 | $3,808 | 0.56% |
| 7826 | 30 | $5,000 | $150,000 | 21.92% |
| 5614 | 85 | $235 | $19,975 | 2.92% |
| 8951 | 450 | $5 | $2,250 | 0.33% |
| 7265 | 76 | $142 | $10,792 | 1.58% |
| 4235 | 100 | $20 | $2,000 | 0.29% |
| 9898 | 2000 | $12 | $24,000 | 3.51% |
| 9542 | 400 | $13 | $5,200 | 0.76% |
| 8474 | $300 | $56 | $16,800 | 2.46% |
| 5454 | 600 | $10 | $6,000 | 0.88% |
| 1236 | 700 | $9 | $6,300 | 0.92% |
| A will have near about 70% market by cost |
| B will have near about 20% market by cost |
| C will have near about 10% market by cost |
C items are in BOLD in the table below
| Item Code | Annual Demand | Unit Price | total cost= unit cost*annual demand | Percent by cost= cost/total sum cost | Percent by volume= volume/total sum volume | Percent by cost | Percent by volume | |
| 2589 | 35 | $7,000 | $245,000 | 35.81% | 0.21% | 80.53% | 0.69% | A |
| 2564 | 52 | $3,000 | $156,000 | 22.80% | 0.30% | |||
| 7826 | 30 | $5,000 | $150,000 | 21.92% | 0.18% | |||
| 9898 | 2000 | $12 | $24,000 | 3.51% | 11.72% | 15.59% | 81.40% | B |
| 5614 | 85 | $235 | $19,975 | 2.92% | 0.50% | |||
| 8474 | $300 | $56 | $16,800 | 2.46% | 1.76% | |||
| 1289 | 128 | $100 | $12,800 | 1.87% | 0.75% | |||
| 7265 | 76 | $142 | $10,792 | 1.58% | 0.45% | |||
| 4556 | 10000 | $1 | $10,000 | 1.46% | 58.61% | |||
| 1236 | 700 | $9 | $6,300 | 0.92% | 4.10% | |||
| 5454 | 600 | $10 | $6,000 | 0.88% | 3.52% | |||
| 9542 | 400 | $13 | $5,200 | 0.76% | 2.34% | 3.88% | 17.91% | C |
| 7896 | 90 | $50 | $4,500 | 0.66% | 0.53% | |||
| 8547 | 136 | $28 | $3,808 | 0.56% | 0.80% | |||
| 6842 | 600 | $5 | $3,000 | 0.44% | 3.52% | |||
| 8496 | 420 | $7 | $2,940 | 0.43% | 2.46% | |||
| 8951 | 450 | $5 | $2,250 | 0.33% | 2.64% | |||
| 4235 | 100 | $20 | $2,000 | 0.29% | 0.59% | |||
| 3564 | 560 | $3 | $1,680 | 0.25% | 3.28% | |||
| 3265 | 300 | $4 | $1,200 | 0.18% | 1.76% |
Item Code Annual Demand Unit Price 4556 10000 $1 2564 52 $3000 1289 128 $100 3265...