QUESTION 4

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	0.37	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 total annual usage.