In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE 1 $ 1,600 11 $ 13,200 2 12,200 12 700 3 2,300 13 42,400 4 50,500 14 10,100 5 11,600 15 1,300 6 900 16 10,400 7 2,100 17 4,100 8 11,200 18 61,600 9 5,200 19 3,600 10 15,200 20 3,000 a. Classify each item in inventory using an ABC plan.

In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items. ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE 1 $ 1,600 11 $ 13,200 2 12,200 12 700 3 2,300 13 42,400 4 50,500 14 10,100 5 11,600 15 1,300 6 900 16 10,400 7 2,100 17 4,100 8 11,200 18 61,600 9 5,200 19 3,600 10 15,200 20 3,000 a. Classify each item in inventory using an ABC plan.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Problem 20-40 (Algo)

ITEM NUMBER	ANNUAL USAGE	ITEM NUMBER	ANNUAL USAGE
1	$	1,600	11	$	13,200
2		12,200	12		700
3		2,300	13		42,400
4		50,500	14		10,100
5		11,600	15		1,300
6		900	16		10,400
7		2,100	17		4,100
8		11,200	18		61,600
9		5,200	19		3,600
10		15,200	20		3,000

a. Classify each item in inventory using an ABC plan.

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