Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ch 12_Inventory Management_ABC_Classification Tool Outlet (5 pts) Tool Outlet sales consumer tools it purchases from manufacturers. In order to maintain accurate perpetual inventory balances, Tool

image text in transcribed
Ch 12_Inventory Management_ABC_Classification Tool Outlet (5 pts) Tool Outlet sales consumer tools it purchases from manufacturers. In order to maintain accurate perpetual inventory balances, Tool Outlet performs cycle counting. An ABC Classification is used to determine the frequency of counting part numbers and tolerance limits for comparing physical counts to perpetual inventory balances. Tool Outlet has the following policy/guideline for determining categorization of its part numbers: A items: 10-20% of part numbers Citems: 50-60% of part numbers B items: balance of part numbers. Typically, ABC items often fall into the following categories: A items: 60-70% of annual dollar usage C items: 10-15% of annual dollar usage B items: Balance (often 15% - 30% of annual dollar usage) Tool outlet provides you with the following information for its Dewalt 20v line of cordless tools: Part Number Unit Cost Annual Usage A10 $10 200 All 10 30 B10 25 600 B11 16 500 C10 36 150 C11 30 40 A12 16 25 A13 40 120 B12 20 80 B13 15 110 C12 80 200 C13 12 90 A14 20 300 A15 10 550 B14 30 800 B15 20 60 a). Develop an ABC Classification for these items

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics Of The Industrial Revolution Internet, Artificial Intelligence And Blockchain

Authors: Nicholas Johnson, Brendan Markey Towler

1st Edition

042977169X, 9780429771699

More Books

Students also viewed these General Management questions

Question

The number of people commenting on the statement

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago