Question
Alice Judy operates a chain of beauty-products retail stores. Her stock holding carries several range of inventory items, and Judy knows that there are costs
Alice Judy operates a chain of beauty-products retail stores. Her stock holding carries several range of inventory items, and Judy knows that there are costs associated with inventory holding. Majority of her stock holdings procured from global market and it has caused issue relates to returns. Furthermore, Alice Judy also faced difficulty in terms of slow inventory turnover for certain products. However, because her time is limited, she cannot carefully evaluate the inventory return policy for all products and Judy wants to classify a range of items according to dollars invested in them. The following table provides information about the 10 core items that she carries:
Items No | Unit Cost | Demand(Units) |
A007 | $5 | 720 |
C423 | $7 | 1160 |
W127 | $6.5 | 650 |
F502 | $3.2 | 960 |
K819 | $8 | 415 |
L3107 | $6.8 | 370 |
S9123 | $4.2 | 1200 |
U3115 | $6 | 680 |
B7723 | $2.7 | 2070 |
V9075 | $3.5 | 1910 |
Compute a complete ABC analysis to classify these items into categories A, B, and C
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