Boreki Enterprises has the following 10 items in inventory. Theodore Boreki asks you, a recent OM graduate, to divide these items into ABC classifications.
|
Item
|
Annual Demand
|
Cost/Unit
|
|
A2
|
3,000
|
$50
|
|
B8
|
4,000
|
12
|
|
C7
|
1,500
|
45
|
|
D1
|
6,000
|
10
|
|
E9
|
1,000
|
20
|
|
F3
|
500
|
500
|
|
G2
|
300
|
1,500
|
|
H2
|
600
|
20
|
|
I5
|
1,750
|
10
|
|
J8
|
2,500
|
5
|
a) Develop an ABC classification system for the 10 items.
b) How can Boreki use this information?
c) Boreki reviews the classification and then places item A2 into the A category. Why might he do so?