Question: Ralph fanaro simply does not have time to analyze all of the items in his company's inventory. As a young manager, he has more important things to do. The following is a table (see the attachment) of six items in inventory along with the unit cost and the demand in units.
Identification code Unit Cost ($) Demand in Units
XX1 5.84 1,200
B66 5.40 1,110
3CPO 1.12 896
33CP 74.54 1,104
R2D2 2.00 1,110
RMS 2.08 961
(a) Find the total amount spent on each item during the year. What is the total investment for all of these?
(b) Find the percentage of the total investment in inventory that is spent on each item.
(c) Based on the percentages in part (b), which item(s) would be classified in categories A , B, and C using ABC analysis?
(d) Which item(s) should Ralph most carefully control using quantitative techniques?