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