Discuss the below:
Q: The manager of an automobile repair shop hopes to achieve a better allocation of inventory control efforts by adopting an A-B-C approach to inventory control.
a. Given the monthly usages in the following table, classify the items in A, B, and C categories according to dollar usage:
| Item |
Usage |
Unit Cost |
Category |
| 4021 |
90 |
$ 1,400 |
|
| 9402 |
300 |
12 |
|
| 4066 |
30 |
700 |
|
| 6500 |
150 |
20 |
|
| 9280 |
10 |
1,020 |
|
| 4050 |
80 |
140 |
|
| 6850 |
2,000 |
10 |
|
| 3010 |
400 |
20 |
|
| 4400 |
5,000 |
5 |
|
b. Determine the percentage of items in each category and the annual dollar value for each category.
| Category |
Percent of Items |
Percent of Total Cost |
| A |
% |
% |
| B |
% |
% |
| C |
% |
% |