In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEM NUMBER ANNUAL USAGE ANNUAL ITEM USAGE NUMBER 1 $ 1,700 11 $ 13,400 2 12,300 12 800 3 2,400 13 42,700 4 50,900 14 10,200 5 13,100 15 1,400 6 900 16 10,500 7 2,200 17 4,200 8 11,300 18 62,000 9 5,300 19 3,700 10 15,400 20 3,100 a. Classify each item in inventory using an ABC plan.
In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEM NUMBER ANNUAL USAGE ANNUAL ITEM USAGE NUMBER 1 $ 1,700 11 $ 13,400 2 12,300 12 800 3 2,400 13 42,700 4 50,900 14 10,200 5 13,100 15 1,400 6 900 16 10,500 7 2,200 17 4,200 8 11,300 18 62,000 9 5,300 19 3,700 10 15,400 20 3,100 a. Classify each item in inventory using an ABC plan.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a complete inventory count of all items
each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor
involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's
items.
ITEM
NUMBER
ANNUAL
USAGE
ANNUAL
ITEM
USAGE
NUMBER
1
$
1,700
11
$ 13,400
2
12,300
12
800
3
2,400
13
42,700
4
50,900
14
10,200
5
13,100
15
1,400
6
900
16
10,500
7
2,200
17
4,200
8
11,300
18
62,000
9
5,300
19
3,700
10
15,400
20
3,100
a. Classify each item in inventory using an ABC plan.
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