CASE 9.1 MAQ Corporation MAQ Corporation, a major producer of consumer electronics equipment, is currently faced with a rapidly growing product line and its associated inventory problems. MAQ's president, Mary Semerod, has decided to initiate a program to analyze the company's inven- tory requirements utilizing different inventory techniques. The first phase of this program consists of an ABC analysis of the company's product line (shown in the following table). Ms. Semerod has encountered difficulties in deciding on the appropriate criteria to use in the classification and in developing appropriate cutoff levels for each class of inventory. To solve her dilemma, Ms. Semerod has contracted the services of a logistics consulting firm to perform the inventory analysis. PRODUCT # SR101 SR103 SR105 SR201 SR203 SR205 SR301 SR303 SR305 SR500 CASE QUESTIONS UNITS SOLD 15,000 750 1,600 45 10 9,250 700 550 3,000 100 PRICE PER UNIT $250 1,500 600 2,250 3,500 500 650 700 920 1,100 PROFIT PER UNIT $50.50 330.00 90.00 877.50 1,750.00 125.00 195.00 196.00 303.60 440.00 SALES DATA (ONE-YEAR PERIOD) 1. If you were employed by the consulting firm, how would you construct your method of analysis? 2. What criteria would you use? 3. What would the cutoff levels be? Be sure to provide explanations of the reasoning supporting your decisions