In: Operations Management
For given ABC analysis the criteria set by the management is All items above 20% of total annual $ value shall be A-items, items between 10% to 20% shall be B-items and items below 10% shall be C-items.
Determine which items shall be A-items?
Item # |
Price/unit |
Quantity/Year |
Annual $ Value |
%age annual $ value |
|
102 |
5 |
2900 |
14500 |
||
103 |
10 |
2000 |
20000 |
||
104 |
7 |
1400 |
9800 |
||
105 |
6 |
3200 |
19200 |
||
106 |
10 |
800 |
8000 |
||
106 |
12 |
1100 |
13200 |
||
107 |
8 |
1200 |
9600 |
||
Total |
94300 |
Select one:
a. Items 103 & 106
b. Items 103, 105, 107
c.
Items 105 & 107
d.
Items 103 & 106
e.
Items 103 & 105
e. 103 and 105 items are under A category. As for Item 103 we have a % annual $ value is 21.20% and for item 105 the % annual $ value is 20.36%. Hence the correct option is E