Consider the sales of the following movie titles in DVD’s: Product Monthly Sales
ID: 463929 • Letter: C
Question
Consider the sales of the following movie titles in DVD’s:
Product
Monthly Sales $ (000's)
Teenage Mutant Ninja Turtles
412
The Hunger Games: Catching Fire
3,424
Maleficient
214
The Lego Movie
1,052
Transformers: Age of Extinction
159
Guardians of the Galaxy
727
Gravity
170
Despicable Me: 2
893
Divergent
205
Rio 2
188
The Hobbit: Desolation of Smaug
843
Thor: The Dark World
172
How to train your dragon 2
451
Frozen
5,056
1)Develop an ABC classification of these products using the formulation given in class.
2)Explain how you will make Logistics decisions based on the classification
3)How would you group the products in a warehouse if you decided to drop Despicable Me, Maleficent, and Rio 2 from stocking in your warehouse since they are covered by another warehouse in your region.
4) If annual sales through the warehouse are forecast to be $25,000, how much inventory investment in the warehouse can be expected?
Product
Monthly Sales $ (000's)
Teenage Mutant Ninja Turtles
412
The Hunger Games: Catching Fire
3,424
Maleficient
214
The Lego Movie
1,052
Transformers: Age of Extinction
159
Guardians of the Galaxy
727
Gravity
170
Despicable Me: 2
893
Divergent
205
Rio 2
188
The Hobbit: Desolation of Smaug
843
Thor: The Dark World
172
How to train your dragon 2
451
Frozen
5,056
Explanation / Answer
1)
ABC Classification of the Products are as shown:
Product
Monthly Sales $ (000's)
% ot total sales
Cumulative % of Total Sales
Interpretation
Group
Frozen
5,056
36%
36%
this DVDs form less than 70% of total sales
A
The Hunger Games: Catching Fire
3,424
25%
61%
The Lego Movie
1,052
8%
68%
Despicable Me: 2
893
6%
75%
This DVDs form about 20% of total sales
B
The Hobbit: Desolation of Smaug
843
6%
81%
Guardians of the Galaxy
727
5%
86%
How to train your dragon 2
451
3%
89%
Teenage Mutant Ninja Turtles
412
3%
92%
This DVDs form 10% of total sales
C
Maleficient
214
2%
94%
Divergent
205
1%
95%
Rio 2
188
1%
96%
Thor: The Dark World
172
1%
98%
Gravity
170
1%
99%
Transformers: Age of Extinction
159
1%
100%
Total
13,966
2)
Logistics decision,
c)
If the required items are dropped from stocking, the products can be classified as follows:
Product
Monthly Sales $ (000's)
% ot total sales
Cumulative % of Total Sales
Interpretation
Group
Frozen
5,056
40%
40%
this DVDs form less than 70% of total sales
A
The Hunger Games: Catching Fire
3,424
27%
67%
The Lego Movie
1,052
8%
75%
This DVDs form about 20% of total sales
B
The Hobbit: Desolation of Smaug
843
7%
82%
Guardians of the Galaxy
727
6%
88%
How to train your dragon 2
451
4%
91%
This DVDs form 10% of total sales
C
Teenage Mutant Ninja Turtles
412
3%
94%
Divergent
205
2%
96%
Thor: The Dark World
172
1%
97%
Gravity
170
1%
99%
Transformers: Age of Extinction
159
1%
100%
Total
12,671
D)
As inventory record is not provided it is not possible to determine inventory investment.
Product
Monthly Sales $ (000's)
% ot total sales
Cumulative % of Total Sales
Interpretation
Group
Frozen
5,056
36%
36%
this DVDs form less than 70% of total sales
A
The Hunger Games: Catching Fire
3,424
25%
61%
The Lego Movie
1,052
8%
68%
Despicable Me: 2
893
6%
75%
This DVDs form about 20% of total sales
B
The Hobbit: Desolation of Smaug
843
6%
81%
Guardians of the Galaxy
727
5%
86%
How to train your dragon 2
451
3%
89%
Teenage Mutant Ninja Turtles
412
3%
92%
This DVDs form 10% of total sales
C
Maleficient
214
2%
94%
Divergent
205
1%
95%
Rio 2
188
1%
96%
Thor: The Dark World
172
1%
98%
Gravity
170
1%
99%
Transformers: Age of Extinction
159
1%
100%
Total
13,966