L. Houts Plastics is a large manufacturer of injection-molded plastics in North
ID: 356041 • Letter: L
Question
L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. Ar investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) L. Houts Plastics Charlotte Inventory Levels Dollar Volume % of Dollar Volume Code 1289 2347 2349 2363 2394 2395 6782 7844 8210 8310 9111 Item Avg. Inventory Value (units) 360 300 120 70 60 30 20 12 (Slunit) 3.25 4.00 2.50 1.30 1.75 1.75 1.15 2.05 1.60 2.00 3.00 1,200 300 39.92 9.98 105 3.49 23 25 0.77 0.82 0.47 0.60 3,006 For the following three questions, consider only items 1289, 2349, and 8210 from the above table for relative classification (these are some of the items for which you computed the metrics). Based on the percentages of dollar volume, item number 1289 should be classified as Item number 2349 should be classified as (2) Item number 8210 should be classified as (3) (1)OB (2)? A (3) OA ??Explanation / Answer
The first step is to complete the table:
Formulas used: dollar value = avg. inventory*value
% of dollar volume = dollar value of an item/total dollar value of all items
Now A category accounts for 80% of total dollar value, B category accounts for 15% of total dollar value and C category accounts for 5% of total dollar value.
On this basis the classification is shown below (after sorting the data on dollar volume basis)
Answers:
(1) item 1289 is A
(2) item 2349 is B
(3) item 8210 is C
Item code Avg. Inventory (units) Value ($/unit) Dollar value % of dollar volume Cumulative % 1289 360 3.25 1,170.00 38.92 38.92 2347 300 4.00 1,200.00 39.92 78.84 2349 120 2.50 300.00 9.98 88.82 2363 70 1.30 91.00 3.03 91.85 2394 60 1.75 105.00 3.49 95.34 2395 30 1.75 52.50 1.75 97.09 6782 20 1.15 23.00 0.77 97.85 7844 12 2.05 24.60 0.82 98.67 8210 5 1.60 8.00 0.27 98.94 8310 7 2.00 14.00 0.47 99.40 9111 6 3.00 18.00 0.60 100.00 Total 3,006 100Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.