In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.   ITEM NUMBER ANNUAL USAGE  ITEM NUMBER ANNUAL USAGE 1 $1,900 11 $13,800 2 12,700 12 1,000 3 2,700 13 43,600 4 51,800 14 10,600 5 10,300 15 1,600 6 1,200 16 10,900 7 2,500 17 4,500 8 11,700 18 63,200 9 5,600 19 4,000 10 15,800 20 3,400           a. Classify each item in inventory using an ABC plan. item # Class (A, B, or C) 1   2   3   4   5   6   7   8   9   10

Practical Management Science
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Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.

 

ITEM
NUMBER
ANNUAL
USAGE
 ITEM
NUMBER
ANNUAL
USAGE
1 $1,900 11 $13,800
2 12,700 12 1,000
3 2,700 13 43,600
4 51,800 14 10,600
5 10,300 15 1,600
6 1,200 16 10,900
7 2,500 17 4,500
8 11,700 18 63,200
9 5,600 19 4,000
10 15,800 20 3,400
       

 

a. Classify each item in inventory using an ABC plan.

item # Class (A, B, or C)
1  
2  
3  
4  
5  
6  
7  
8  
9  
10  

 

 

 

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