Consider a warehouse with 5 SKU’s. The unit selling prices for these items are $
ID: 432105 • Letter: C
Question
Consider a warehouse with 5 SKU’s. The unit selling prices for these items are $54, $5, $527, $500, and $503 respectively. The annual sales volumes for these 5 items are 927 units, 1,000 units, 2,000 units, 20 units, and 384 units. According to our discussion on inventory profiling, what percentage of the annual sales is the result from the top 20 % of the SKU’s? Ignore the percentage sign and round your answer to the nearest integer. For example, if your answer is 34.56%, input 35; if your answer is 12.23%, input 12.
Explanation / Answer
Annual sales volume calculation:
SKU’s
Unit selling price
The annual sales volume (no. of units)
The annual sales volume ($) (Price * no. of units)
% of annual sale (Annual sales volume of SKU/ total annual sales volume)
1
$54
927
$50,058
3.81%
2
$5
1000
$5,000
0.38%
3
$527
2000
$1,054,000
80.32%
4
$500
20
$10,000
0.76%
5
$503
384
$193,152
14.72%
Total
$1,312,210
Let’s arrange it from highest sales volume to lowest
There are 5 SKU’s therefore 1 SKU is equal to 20% of SKU’s
Top SKU’s annual sale is 80.32% of total sales of 5 SKU.
Therefore 80.32 percentages of the annual sales is the result from the top 20 % of the SKU’s.
SKU’s
Unit selling price
The annual sales volume (no. of units)
The annual sales volume ($) (Price * no. of units)
% of annual sale (Annual sales volume of SKU/ total annual sales volume)
1
$54
927
$50,058
3.81%
2
$5
1000
$5,000
0.38%
3
$527
2000
$1,054,000
80.32%
4
$500
20
$10,000
0.76%
5
$503
384
$193,152
14.72%
Total
$1,312,210