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 inventory requirements utilizing different inventory techniques. The first phase of this program consists of an ABC analysis of the company's product line. Mary has encountered difficulties in deciding on the appropriate criteria to use in the classification and in developing the appropriate cutoff levels for each class of inventory. To solve her dilemma Mary has contracted the services of a logistics consulting firm to perform the inventory analysis. SALES DATA (ONE YEAR PERIOD) SALES DATA (ONE YEAR PERIOD) Product Units Sold Price per Total cost unit per unit/year Percent Re-order ABC of total from highest Cumulative % 80-20 cost to lowest % Percentage SR101 SR103 SR105 SR201 SR203 SR205 SR301 SR303 SR305 SR500 Totals 15,000 750 1,600 45 10 9,250 700 550 3,000 100 31,005 $250 $1,500 $600 $2,250 $3,500 $500 $650 $700 $920 1,100 11970 3,750,000 1,125,000 960,000 101,250 35,000 4,625,000 445,000 385,000 2,760,000 110,000 14,296,250 26.2% 7.9% 6.7% .7% .2% 32.4% 3.1% 2.7% 19.3% .8% 1 If you were employed by the consulting firm, how would you construct your method of analysis? 2 What inventory items would you address first and why? 3 Would you address the B&C items and if so when