Assignment 7 cover 6 questions in Chapter 12 and Chapter 8. L. Houts Plastics is

Question

Assignment 7 cover 6 questions in Chapter 12 and Chapter 8. L. Houts Plastics is a large manufacturer of injection- molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? L. Houts Plastics' Charlotte Inventory Levels ITEM CODE # AVERAGE INVENTORY (UNITS) : VALUE ($/UNIT) 1. 1289 2347 2349 2363 2394 2395 6782 7844 8210 8310 9111 400 300 120 75 60 30 20 12 3.75 4.00 2.50 1.50 1.75 2.00 1.15 2.05 1.80 2.00 3.00

Explanation / Answer

ABC CLASSIFICATION LIST: Item Code Category 1289 A 2347 A 2349 B 2363 B 2394 B 2395 C 6782 C 7844 C 8210 C 8310 C 9111 C WORK SHEETS: CALCULATION OF DOLLAR VALUE AND RANKING: Item Code Avg inventory (Units) Value per unit ($) Total Dollar Value Dollar Volume Rank 1289 400 3.75 1500.00 1 2347 300 4.00 1200.00 2 2349 120 2.50 300.00 3 2363 75 1.50 112.50 4 2394 60 1.75 105.00 5 2395 30 2.00 60.00 6 6782 20 1.15 23.00 7 7844 12 2.05 24.60 8 8210 8 1.80 14.40 10 8310 7 2.00 14.00 11 9111 6 3.00 18.00 9 3371.50 RESULTS SORTED BY DOLLAR VOLUME & CATEGORISATION: Dollar Volume Rank Item Code Dollar Volume % of Dollar Volume Cumulative % of dollar volume Category Total % in category 1 1289 1500.00 44.49% 44.49% A 80.08% 2 2347 1200.00 35.59% 80.08% A 3 2349 300.00 8.90% 88.98% B 15.35% 4 2363 112.50 3.34% 92.32% B 5 2394 105.00 3.11% 95.43% B 6 2395 60.00 1.78% 97.21% C 4.57% 7 6782 23.00 0.68% 97.89% C 8 7844 24.60 0.73% 98.62% C 9 9111 18.00 0.53% 99.16% C 10 8210 14.40 0.43% 99.58% C 11 8310 14.00 0.42% 100.00% C 3371.50 100.00% 100.00%

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