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Introduction In this assignment you will see how Stock Keeping Units (SKU) are analyzed by logistics managers. The technique is referred to as an ABC

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Introduction In this assignment you will see how Stock Keeping Units (SKU) are analyzed by logistics managers. The technique is referred to as an ABC Analysis and is widely used in contemporary businesses to prioritize SKU's according to their importance. You can look up ABC Analysis in your textbook's index. For this assignment you will compare individual SKU's in three categories total number of units sold total profits earned from sales, and total dolor revenue from sales By calculating each SKU's contribution to those categories you can determine which SKU's account for 80% of the business sale volume and profit These primary SKUs are classified as "A" items and they demand the most attention of managers. See Chapter 8 of your text for reference. This assignment is worth 50 points Submission Send your analysis to the instructor via Blackboard not later than the due date for this assignment. You may write which Skus are A B, and C. but, to get extra credit worth 20 points) send your answers via Excel spreadsheet Here are the steps 1. Compute the total number of units sold by adding up all the individual su values in the second column) and put that number at the bottom of the "Units Sold column 2. Compute the total dollar figure for all profits tarred by adding up all the individual skuvalues in the fourth column) and put that number at the bottom of the "Profit/Unit" column 1. Compute the total dollar figure for all sales by adding up all the individual SKU) value in the nith column) and put that number at the bottom of the "Total Sales column 4. You should have three summations for the three columns 5. Now for every individual Sko Take the raw value from the table column and divide that value into the corresponding column's total to get a percentage value. For instance, you take a skus individual profit dollar value and divide that into the total profits column value. You will divide individual su values into the corresponding column total for units sold profit per unit and total sales. Doing this will give you a percentage for each sku for all three columns It is a lot of calculating and many students prefer to let Excel do all the work. Using Excel - you can create a cumulative percentage column which both checks your math and lets you know which SKU's account for the majority of units sold, profits earned and dollars received Once you have all your percentages check your math by making sure that each column's percentages equal up to 100% (or close to it based on rounding error). Once you have all the computations done and all the appropriate percentages calculated you then "rank order" SKU's based on which ones contribute most to units sold, profit, and salos. You should select SKU's with the largest percentage in each of the three categories until 80% of all profits are accounted for. These are your items. The next 10% are B and Citems. "items are very important to the business since they represent those SKU's that contribute most to money earned To go further with the analysis - you can compute the price per unit column's total and repeat the process as you did with units sold, pront and sales. Now, for those SKU's that account for 80% of the price-you can identify which ones are most expensive. Because of their price they have the most carrying/holding costs. They may not contribute all that much to revenue - but, they receive management attention since just sitting on the shell incurs opportunity costs, DATA TO USE SKU Unit Sold Price/Unit ProfitUnit Total Sales 784 SR 205 9,876 SR 101 12,386 SR 305 3,437 SR 103 SR 105 1,597 SR 301 673 SR 303 547 SR 201 48 SR 500 78 SR 203 2 mod 4 soreadsheet examesx $450.00 $ 275.00 $917.00 $1.530.00 $579.00 S 600.00 $725.00 $2,500.00 $1,000.00 $3.000.00 $ 149,00 $ 8250 $240.00 $ 450 00 $ 173.30 $ 18000 $ 200.00 5 975.00 $312.00 $1,200.00 $4,444,200.00 $3,406,150 00 $ 3,151,729.00 $ 1,199.520.00 $ 924,663.00 5 403,800.00 $300.575.00 $ 120,000.00 S 78,000.00 $6,000.00 Introduction In this assignment you will see how Stock Keeping Units (SKU) are analyzed by logistics managers. The technique is referred to as an ABC Analysis and is widely used in contemporary businesses to prioritize SKU's according to their importance. You can look up ABC Analysis in your textbook's index. For this assignment you will compare individual SKU's in three categories total number of units sold total profits earned from sales, and total dolor revenue from sales By calculating each SKU's contribution to those categories you can determine which SKU's account for 80% of the business sale volume and profit These primary SKUs are classified as "A" items and they demand the most attention of managers. See Chapter 8 of your text for reference. This assignment is worth 50 points Submission Send your analysis to the instructor via Blackboard not later than the due date for this assignment. You may write which Skus are A B, and C. but, to get extra credit worth 20 points) send your answers via Excel spreadsheet Here are the steps 1. Compute the total number of units sold by adding up all the individual su values in the second column) and put that number at the bottom of the "Units Sold column 2. Compute the total dollar figure for all profits tarred by adding up all the individual skuvalues in the fourth column) and put that number at the bottom of the "Profit/Unit" column 1. Compute the total dollar figure for all sales by adding up all the individual SKU) value in the nith column) and put that number at the bottom of the "Total Sales column 4. You should have three summations for the three columns 5. Now for every individual Sko Take the raw value from the table column and divide that value into the corresponding column's total to get a percentage value. For instance, you take a skus individual profit dollar value and divide that into the total profits column value. You will divide individual su values into the corresponding column total for units sold profit per unit and total sales. Doing this will give you a percentage for each sku for all three columns It is a lot of calculating and many students prefer to let Excel do all the work. Using Excel - you can create a cumulative percentage column which both checks your math and lets you know which SKU's account for the majority of units sold, profits earned and dollars received Once you have all your percentages check your math by making sure that each column's percentages equal up to 100% (or close to it based on rounding error). Once you have all the computations done and all the appropriate percentages calculated you then "rank order" SKU's based on which ones contribute most to units sold, profit, and salos. You should select SKU's with the largest percentage in each of the three categories until 80% of all profits are accounted for. These are your items. The next 10% are B and Citems. "items are very important to the business since they represent those SKU's that contribute most to money earned To go further with the analysis - you can compute the price per unit column's total and repeat the process as you did with units sold, pront and sales. Now, for those SKU's that account for 80% of the price-you can identify which ones are most expensive. Because of their price they have the most carrying/holding costs. They may not contribute all that much to revenue - but, they receive management attention since just sitting on the shell incurs opportunity costs, DATA TO USE SKU Unit Sold Price/Unit ProfitUnit Total Sales 784 SR 205 9,876 SR 101 12,386 SR 305 3,437 SR 103 SR 105 1,597 SR 301 673 SR 303 547 SR 201 48 SR 500 78 SR 203 2 mod 4 soreadsheet examesx $450.00 $ 275.00 $917.00 $1.530.00 $579.00 S 600.00 $725.00 $2,500.00 $1,000.00 $3.000.00 $ 149,00 $ 8250 $240.00 $ 450 00 $ 173.30 $ 18000 $ 200.00 5 975.00 $312.00 $1,200.00 $4,444,200.00 $3,406,150 00 $ 3,151,729.00 $ 1,199.520.00 $ 924,663.00 5 403,800.00 $300.575.00 $ 120,000.00 S 78,000.00 $6,000.00

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