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    Inventory Management

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    The manager of a furniture manufacturing plant hopes to achieve a better allocation of inventory control efforts by adopting an ABC approach to inventory control. The yearly usages are listed below. Classify the items in A, B, and C categories according to annual dollar usage.

    Item Annual Usage Unit Cost
    L 50 $1,400
    M 100 $10
    N 30 $900
    P 150 $20
    R 9 $1,000
    S 90 $100
    T 2,000 $10
    U 200 $10
    W 1,000 $60

    Item T will be classified as:
    A) A item
    B) B item
    C) C item
    D) None of the above

    25.(3). Using the data of Question 24, item P will be classified as:
    A) A item
    B) B item
    C) C item
    D) None of the above

    26.(5) Using the data of Question 24, item R will be classified as:
    A) A item
    B) B item
    C) C item
    D) None of the above

    27.(4) Given that unit item cost = $25, annual carrying charge = 60%, annual demand = 3600 units and ordering cost = $15 per order, the EOQ is:
    A) 60.00
    B) 84.85
    C) 141.42
    D) 293.94
    E) 7200

    28.(6) The total cost per year for Problem 27, assuming no stockout, is approximately equal to

    A) The Total Cost cannot be determined from the given information
    B) $636
    C) $1,273
    D) $6,360
    E) $12,727

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    https://brainmass.com/business/inventory-management/inventory-management-manufacturing-446920

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    Solution Preview

    Please refer attached files for tables and better formatting.

    Item T will be classified as:
    Correct Answer : B) B item

    25.(3). Using the data of Question 24, item P will be classified as:
    Correct Answer : C) C item

    26.(5) ...

    Solution Summary

    Solution classifies the given items based on ABC approach. It also calculates EOQ and total cost in the given case.

    $2.19

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