Please give me right answers only... Thank you KPO, Inc., is considering the use
ID: 353883 • Letter: P
Question
Please give me right answers only... Thank you
KPO, Inc., is considering the use of ABC analysis to classify SKUs in three categories: those that will be delivered daily from their supplier (class A items), those that will be controlled using a continuous review system (class B items), and those that will be held in a two-bin system (class C items). KPO Inc. has asked you to determine the ABC classification.
The table below shows the data for 10 inventoried items
Item Average Monthly Demand Price per unit
1 700 $6
2 200 $4
3 150 $200
4 1,100 $20
5 3,000 $21
6 1,000 $1
7 3,000 $2
8 2,500 $1
9 500 $10
10 1,000 $2
Explanation / Answer
Item Average Monthly Demand Price per unit ($) Monthly dollar value % of total Cumulative % of SKU Class 5 3,000 21 63,000 46.15 10% A 3 150 200 30,000 21.98 20% A 4 1,100 20 22,000 16.12 30% A 7 3,000 2 6,000 4.39 40% B 9 500 10 5,000 3.66 50% B 1 700 6 4,200 3.08 60% B 8 2,500 1 2,500 1.83 70% B 10 1,000 2 2,000 1.46 80% B 6 1,000 1 1,000 0.73 90% C 2 200 4 800 0.58 100% C Total 136,500