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In the past, Taylor Industries has used a fixedtime period inventory system that involved taking a complete inventory count of all items each month. However,

In the past, Taylor Industries has used a fixedtime period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.

ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE
1 $ 1,900 11 $ 13,700
2 12,600 12 1,000
3 2,600 13 43,400
4 51,600 14 10,500
5 10,200 15 1,600
6 1,100 16 10,800
7 2,400 17 4,400
8 11,600 18 62,900
9 5,500 19 3,900
10 15,700 20 3,300

a. Classify each item in inventory using an ABC plan.

image text in transcribed a. Classify each item in inventory using an ABC plan

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