DAT, Inc., produces digital audiotapes to be used in the consumer audio division

Question

DAT, Inc., produces digital audiotapes to be used in the consumer audio division. DAT lacks sufficient personnel in its inventory supply section to closely control each item stocked, so it has asked you to determine an ABC classification. Here is a sample from the inventory records: AVERAGE MONTHLY DEMAND ITEM PRICE PER UNIT $ 8.00 14.00 22.00 10.00 28.00 4.00 6.00 11.00 5.00 16.00 400 2,300 1,000 4 4,000 1,400 900 2,400 800 1,800 Develop an ABC classification for these 10 items Monthly Usage (S) Class 10

Explanation / Answer

Item Average Monthly Demand Price per unit ($) Monthly Usage ($) Class 1 400 8 3200 C 2 2300 14 32200 B 3 1000 22 22000 B 4 300 10 3000 C 5 4000 28 112000 A 6 1400 4 5600 C 7 900 6 5400 C 8 2400 11 26400 B 9 800 5 4000 C 10 1800 16 28800 B

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