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QUESTION 3 Given the following inventory information, construct an (a) ABC analysis by annual dollar usage, (b) ABC analysis by current inventory value, and (c)

QUESTION 3

Given the following inventory information, construct an (a) ABC analysis by annual dollar usage, (b) ABC analysis by current inventory value, and (c) an ABC inventory matrix. Is the firm stocking the correct inventories?

Item Number Unit Cost Annual Usage Phy Inv
B8867 6 100 8,000
J1252 5.25 6,500 120
K9667 0.88 4,000 1,000
L2425 1 1,500 375
M4554 5.5 2,000 500
T6334 70 500 800
W9856 0.75 800 20,000
X2215 1.5 8,000 2,000
Y3214 32 1,000 500
Y6339 4 3,500 125

Calculate the annual usage for K9667.

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