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 ITEM NUMBER ANNUAL USAGE 1 $ 1,500 11 $ 13,000 2 12,000 12 600 3 2,200 13 42,000 4 50,000 14 9,900 5 9,600 15 1,200 6 750 16 10,200 7 2,000 17 4,000 8 11,000 18 61,000 9 800 19 3,500 10 15,000 20 2,900 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 ITEM NUMBER ANNUAL USAGE 1 $ 1,500 11 $ 13,000 2 12,000 12 600 3 2,200 13 42,000 4 50,000 14 9,900 5 9,600 15 1,200 6 750 16 10,200 7 2,000 17 4,000 8 11,000 18 61,000 9 800 19 3,500 10 15,000 20 2,900 a. Classify each item in inventory using an ABC plan
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
Related questions
Question
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 |
ITEM NUMBER |
ANNUAL USAGE |
||
1 | $ | 1,500 | 11 | $ | 13,000 |
2 | 12,000 | 12 | 600 | ||
3 | 2,200 | 13 | 42,000 | ||
4 | 50,000 | 14 | 9,900 | ||
5 | 9,600 | 15 | 1,200 | ||
6 | 750 | 16 | 10,200 | ||
7 | 2,000 | 17 | 4,000 | ||
8 | 11,000 | 18 | 61,000 | ||
9 | 800 | 19 | 3,500 | ||
10 | 15,000 | 20 | 2,900 | ||
a. Classify each item in inventory using an ABC plan
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning