To classify: The inventory items using ABC classification system. Introduction: ABC classification system: It is an inventory method for classifying the items under three different categories as: A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory. B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory. C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory. The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

“Implementing a Performance Management Communication Plan at Accounting, Inc.” Evaluate Accounting Inc.’s communication plan. Specifically, does it answer all of the questions that a good communication plan should answer? Which questions are left unanswered? How would you provide answers to the unanswered questions? “Implementing an Appeals Process at Accounting, Inc.” If you were to design an appeals process to handle these complaints well, what would be the appeal process? Describe the recommended process and why.

The annual demand for water bottles at Mega Stores is 500 units, with an ordering cost of Rs. 200 per order. If the annual inventory holding cost is estimated to be 20%. of unit cost, how frequently should he replenish his stocks? Further, suppose the supplier offers him a discount on bulk ordering as given below. Can the manager reduce his costs by taking advantage of either of these discounts? Recommend the best ordering policy for the store. Order size Unit cost (Rs.) 1 – 49 pcs. 20.00 50 – 149 pcs. 19.50 150 – 299 pcs. 19.00 300 pcs. or more 18.00

Help answer showing level work and formulas

Answer 2

Question

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Answer 6

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

Answer 7

Chapter 12, Problem 2P

a)

Summary Introduction

To classify: The inventory items using ABC classification system.

Introduction:

ABC classification system:

It is an inventory method for classifying the items under three different categories as:

A: most valuable items which accounts to 70-80 percent of annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items which accounts to 15-25 percent of annual consumption value. B-items typically account for 50 percent of total inventory.

C: least valuable items which accounts to 5 percent of annual consumption value. C-items account for 30 percent of total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

Answer 8

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

Answer 9

b)

Summary Introduction

To determine: How BI person can use the information gathered from the classification.

Answer 10

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Answer 11

c)

Summary Introduction

To determine: Why BI person placed item A2 in A-class items.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 12 - Ethical Dilemma Wayne Hills Hospital in tiny...Ch. 12 - Prob. 1DQ Ch. 12 - Prob. 2DQ Ch. 12 - What is the purpose of the ABC classification...Ch. 12 - Prob. 4DQ Ch. 12 - Explain the major assumptions of the basic EOQ...Ch. 12 - Prob. 6DQ Ch. 12 - Prob. 7DQ Ch. 12 - Prob. 8DQ Ch. 12 - What impact does a decrease in setup time hive on...

Solution Summary: The author explains the ABC classification system, which is an inventory method for classifying the items under three different categories.

Concept explainers

Videos

To determine: How BI person can use the information gathered from the classification.

To determine: Why BI person placed item A2 in A-class items.

Want to see the full answer?

Chapter 12 Solutions