Boreki Enterprise has the following 10 items in inventory. Theodore Boreki asks you, a recent OM graduate, to divide these items into ABC classifications. Fill in the blanks and then answer the following questions. (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) Dollar Volume % of Total Dollar Item Annual Demand Cost/Unit Volume A2 500 300 4000 1500 B8 12 48,000 7.02 C7 45 67,500 9.87 D1 20 35 1000 20,000 E9 20 2.92 F3 34 250 300,000 12,000 43.85 G2 H2 200 600 1500 20 1.75 15 1000 65 J8 2500 12,500 1.83

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
icon
Related questions
Question

m12h6p3

### Boreki Enterprise Inventory Analysis

Boreki Enterprise has the following 10 items in inventory. Theodore Boreki has tasked a recent Operations Management (OM) graduate with dividing these items into ABC classifications. The table below presents the data for each item, including calculations for dollar volume and percentage of total dollar volume. (Dollar volume is rounded to the nearest whole number, and percentage of dollar volume to two decimal places.)

| Item | Annual Demand | Cost/Unit | Dollar Volume | % of Total Dollar Volume |
|------|---------------|-----------|---------------|--------------------------|
| A2   | 500           | 300       | 150,000       | 21.92                    |
| B8   | 4000          | 12        | 48,000        | 7.02                     |
| C7   | 1500          | 45        | 67,500        | 9.87                     |
| D1   | 20            | 35        | 700           | 0.10                     |
| E9   | 1000          | 20        | 20,000        | 2.92                     |
| F3   | 34            | 250       | 8,500         | 1.24                     |
| G2   | 200           | 1500      | 300,000       | 43.85                    |
| H2   | 600           | 20        | 12,000        | 1.75                     |
| I5   | 1000          | 65        | 65,000        | 9.50                     |
| J8   | 2500          | 5         | 12,500        | 1.83                     |

**Explanation of Calculations:**

- **Dollar Volume:** Calculated by multiplying the annual demand by the cost per unit for each item.
- **% of Total Dollar Volume:** Calculated by dividing the dollar volume of each item by the total dollar volume for all items combined, then multiplying by 100 to convert to a percentage.

This analysis helps in classifying items into categories such as A, B, and C based on their dollar volume contribution to the total inventory, aiding in effective inventory management strategies.
Transcribed Image Text:### Boreki Enterprise Inventory Analysis Boreki Enterprise has the following 10 items in inventory. Theodore Boreki has tasked a recent Operations Management (OM) graduate with dividing these items into ABC classifications. The table below presents the data for each item, including calculations for dollar volume and percentage of total dollar volume. (Dollar volume is rounded to the nearest whole number, and percentage of dollar volume to two decimal places.) | Item | Annual Demand | Cost/Unit | Dollar Volume | % of Total Dollar Volume | |------|---------------|-----------|---------------|--------------------------| | A2 | 500 | 300 | 150,000 | 21.92 | | B8 | 4000 | 12 | 48,000 | 7.02 | | C7 | 1500 | 45 | 67,500 | 9.87 | | D1 | 20 | 35 | 700 | 0.10 | | E9 | 1000 | 20 | 20,000 | 2.92 | | F3 | 34 | 250 | 8,500 | 1.24 | | G2 | 200 | 1500 | 300,000 | 43.85 | | H2 | 600 | 20 | 12,000 | 1.75 | | I5 | 1000 | 65 | 65,000 | 9.50 | | J8 | 2500 | 5 | 12,500 | 1.83 | **Explanation of Calculations:** - **Dollar Volume:** Calculated by multiplying the annual demand by the cost per unit for each item. - **% of Total Dollar Volume:** Calculated by dividing the dollar volume of each item by the total dollar volume for all items combined, then multiplying by 100 to convert to a percentage. This analysis helps in classifying items into categories such as A, B, and C based on their dollar volume contribution to the total inventory, aiding in effective inventory management strategies.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 3 images

Blurred answer
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.