Question 1: The manager of a furniture manufacturing plant hopes to achieve a better allocation of inventory control efforts by adopting an ABC approach to inventory control. The yearly usages are listed below. Classify the items in A, B, and C categories according to annual dollar usage.
|
Item
|
Annual Usage
|
Unit Cost
|
|
L
|
50
|
$1,400
|
|
M
|
100
|
$10
|
|
N
|
30
|
$900
|
|
P
|
150
|
$20
|
|
R
|
9
|
$1,000
|
|
S
|
90
|
$100
|
|
T
|
2,000
|
$10
|
|
U
|
200
|
$10
|
|
W
|
1,000
|
$60
|
Item T will be classified as:
A) A item
B) B item
C) C item
D) None of the above
Question 2: Using the data above, item P will be classified as:
A) A item
B) B item
C) C item
D) None of the above
Question 3: Using the data of Question above, item R will be classified as:
A) A item
B) B item
C) C item
D) None of the above
Question 4: Given that unit item cost = $25, annual carrying charge = 60%, annual demand = 3600 units and ordering cost = $15 per order, the EOQ is:
A) 60.00
B) 84.85
C) 141.42
D) 293.94
E) 7200
Question 5: The total cost per year for Problem 27, assuming no stockout, is approximately equal to
A) The Total Cost cannot be determined from the given information
B) $636
C) $1,273
D) $6,360
E) $12,727