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 $ 1,500 11 $ 13,000 2 12,000 12 600 3 2,200 13 42,000 4 50,000 14 9,900 5 9,600 15 1,200 6 750 16 10,200 7 2,000 17 4,000 8 11,000 18 61,000 9 800 19 3,500 10 15,000 20 2,900 a. Classify each item in inventory using an ABC plan
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 $ 1,500 11 $ 13,000 2 12,000 12 600 3 2,200 13 42,000 4 50,000 14 9,900 5 9,600 15 1,200 6 750 16 10,200 7 2,000 17 4,000 8 11,000 18 61,000 9 800 19 3,500 10 15,000 20 2,900 a. Classify each item in inventory using an ABC plan
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...
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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 | $ | 1,500 | 11 | $ | 13,000 |
| 2 | 12,000 | 12 | 600 | ||
| 3 | 2,200 | 13 | 42,000 | ||
| 4 | 50,000 | 14 | 9,900 | ||
| 5 | 9,600 | 15 | 1,200 | ||
| 6 | 750 | 16 | 10,200 | ||
| 7 | 2,000 | 17 | 4,000 | ||
| 8 | 11,000 | 18 | 61,000 | ||
| 9 | 800 | 19 | 3,500 | ||
| 10 | 15,000 | 20 | 2,900 | ||
a. Classify each item in inventory using an ABC plan
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