) Do an ABC analysis and identify the A , B and C items using the general guidel
ID: 379120 • Letter: #
Question
) Do an ABC analysis and identify the A , B and C items using the general guidelines given in the text. (Fill in the missing numbers and briefly describe your reasoning for classification into A,B and C.
Item description
Price per unit
# of units consumed per year
Total dollar value
Identify the item as A , B or C
Bolts
0.08
200000
16000
Nuts
0.05
200000
10000
Washers
0.002
400000
800
Frame
20.00
10000
200000
Handlebar
22.00
10000
220000
Seat
5.00
10000
50000
Bell
3.00
6000
18000
Ringer
2.00
4000
Brakes
3.00
10000
Chain mechanism
5
10000
Reasons for why an item is classified as A, B or C: ______________________________________________________________
_________________________________________________________________________________________________________
__________________________________________________________________________________________________________
Item description
Price per unit
# of units consumed per year
Total dollar value
Identify the item as A , B or C
Bolts
0.08
200000
16000
Nuts
0.05
200000
10000
Washers
0.002
400000
800
Frame
20.00
10000
200000
Handlebar
22.00
10000
220000
Seat
5.00
10000
50000
Bell
3.00
6000
18000
Ringer
2.00
4000
Brakes
3.00
10000
Chain mechanism
5
10000
Explanation / Answer
Item description
Price per unit
# of units consumed per year
Total dollar value
% total
Identify the item as A , B or C
Handlebar
22
10000
220000
36.50%
A
Frame
20
10000
200000
33.18%
A
Seat
5
10000
50000
8.29%
B
Chain mechanism
5
10000
50000
8.29%
B
Brakes
3
10000
30000
4.98%
B
Bell
3
6000
18000
2.99%
B
Bolts
0.08
200000
16000
2.65%
C
Nuts
0.05
200000
10000
1.66%
C
Ringer
2
4000
8000
1.33%
C
Washers
0.002
400000
800
0.13%
C
‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.
‘B’ items - 30% of the items accounts for 25% of the annual consumption value of the items.
‘C’ items - 50% of the items accounts for 5% of the annual consumption value of the items
Item description
Price per unit
# of units consumed per year
Total dollar value
% total
Identify the item as A , B or C
Handlebar
22
10000
220000
36.50%
A
Frame
20
10000
200000
33.18%
A
Seat
5
10000
50000
8.29%
B
Chain mechanism
5
10000
50000
8.29%
B
Brakes
3
10000
30000
4.98%
B
Bell
3
6000
18000
2.99%
B
Bolts
0.08
200000
16000
2.65%
C
Nuts
0.05
200000
10000
1.66%
C
Ringer
2
4000
8000
1.33%
C
Washers
0.002
400000
800
0.13%
C
‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.
‘B’ items - 30% of the items accounts for 25% of the annual consumption value of the items.
‘C’ items - 50% of the items accounts for 5% of the annual consumption value of the items
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