Consider a warehouse with 5 SKU’s. The unit selling prices for these items are $
ID: 431360 • Letter: C
Question
Consider a warehouse with 5 SKU’s. The unit selling prices for these items are $113, $5, $540, $500, and $748 respectively. The annual sales volumes for these 5 items are 954 units, 1,000 units, 2,000 units, 20 units, and 370 units. According to our discussion on inventory profiling, what percentage of the annual sales is the result from the top 20 % of the SKU’s?Ignore the percentage sign and round your answer to the nearest integer. For example, if your answer is 34.56%, input 35; if your answer is 12.23%, input 12.
Explanation / Answer
Please refer to below table for relevant details :
SKU
Unit value($)
Number of units
Total value ($)
Percentage of annual sales ($)
1
540
2000
1080000
72.99
2
748
370
276760
18.71
3
113
954
107802
7.29
4
500
20
10000
0.68
5
5
1000
5000
0.34
TOTAL =
1479562
It is to be noted that :
Total value ( $) = Unit value ($) x Number of units
Total annual sales = Sum of total values of 5 SKUs = $1479562
Percentage of annuals sales for a SKU
= Total value for that SKU / Total annual sales ($1479562)
Since there are 5 SKUs , top 20% of SKUs = 0.20 x 5 = 1
Percentage of annual sales contributed by top SKU = 72.99 % ( 73% rounded to nearest whole number )
73% OF ANNUAL SALES IS RESULT OF TOP 20% OF THE SKUS
SKU
Unit value($)
Number of units
Total value ($)
Percentage of annual sales ($)
1
540
2000
1080000
72.99
2
748
370
276760
18.71
3
113
954
107802
7.29
4
500
20
10000
0.68
5
5
1000
5000
0.34
TOTAL =
1479562