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In the past, Taylor industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However,
In the past, Taylor industries has used a fixed-time 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 ITEM NUMBER NUMBER 1 ANNUAL USAGE $1,500 12,000 ANNUAL USAGE $13,000 600 11 12 2,200 13 42,000 50,000 14 9,900 9,600 15 1,200 16 10,200 17 4,000 750 2,000 11,000. 800 18 61,000 9 19 3,500 10 15,000 20 2,900 a. What would you recommend Taylor do to cut back its labor cost? (Illustrate using an ABC plan.) Item Number Class 2 3 4 5 6 7 8 9 10 11 12 13 14
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