Question

L. Houts Plastics is a large manufacturer of​ injection-molded plastics in North Carolina. An 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
Item Code	Avg. Inventory​ (units)		Value ​($/unit)		Dollar Volume		​% of Dollar Volume
12891289	360360		3.753.75		nothing		nothing
23472347	300300		4.004.00		1 comma 2001,200		37.6837.68
23492349	120120		2.502.50		300300		9.429.42
23632363	6565		1.301.30		nothing		nothing
23942394	6060		1.751.75		105105		3.303.30
23952395	2525		2.002.00		nothing		nothing
67826782	2020		1.151.15		2323		0.720.72
78447844	1212		2.052.05		2525		0.770.77
82108210	88		2.002.00		nothing		nothing
83108310	77		2.002.00		1414		0.440.44
91119111	66		3.003.00		1818		0.570.57
					3 comma 1853,185

Answer 1

We tabulate the data and complete the table as shown below:

The blank fields are calculated as shown in green.

The classification into A, B, C category is shown in last column

A category = Cummulative % of $ Usage upto 80%

B category = Cummulative % of $ Usage from 80% to 95%

C category = Cummulative % of $ Usage from 95% to 100%

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