The manager of a traffic and safety company wants to use the ABC classification system to classify its inventory items.

The annual demand and the selling price of each item are listed in the table below.

ITEM CODE # PRICE/UNIT (SAR) ANNUAL DEMAND (UNITS)

IA510 450 5,000 IE510 725 14,000 IE511 500 15,000 IE518 75 3,000 IE521 7.5 20,000 IE523 100 1,000 IE534 15 40,000 XA010 600 7,000 XA011 800 2,000 XF010 120 15,000 Develop an ABC classification for these 10 items and explain how the company can use this classification. lop5