Question

TASK-2

In a warehouse the Materials manager Mr. Fahad is looking forward to categorize the materials stocked in his warehouse using ABC analysis. He decided the criteria that all the materials above 20% of annual consumption value shall be categorized as A-items, the items between 10% to 20% of annual consumption value shall be categorized as B-items and the items below 10% of annual consumption value shall be categorized as C-items. Using the following inventory records you are required to categorized the items and prepare a final report for Mr. Fahad.  

Item Code	Consumption		Price/Unit	Annual Consumption Value	%age of Annual Consumption Value	A/B/C
	Daily	Yearly
20-X-00	10		25
20-X-01	12		15
20-X-02	6		50
20-X-03	8		28
20-X-04	15		8
20-X-05	11		13
20-X-06	14		8
20-X-07	7		60
20-X-08	9		20
20-X-09	5		70
TOTAL

Final Report

Item Code	%age of Annual Consumption Value	A/B/C	Total %age of items A, items B & items C

Answer 1

Answer: Here, we will classify the given items by following the steps as mentioned below:

Step 1: First, find the annual consumption value for all the items as mentioned in the below table:

(Note: As there is no specific information is mentioned in the question, we have assumed 360 days in a year)

Step 2: Now, rearrange the given table in the descending order of annual dollar consumption, starting from the highest annual consumption to the lowest annual consumption:

Step 2: Find the column of % of Annual Consumption as mentioned in the below table:

Step 3: Classify the items based on the criteria given in the question:

Hence, we get: