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HW4S - ISE 410 Homework 4 Due on 1 Assuming that you have...

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ISE 410 Homework # 4 Due on 10/24/06 1. Assuming that you have no data on total annual dollar movement ( Σ Dc ), which of the following SKUs (and under what circumstances) should be classified as A, B, or C items? ITEM CLASSIFICATION REASON Spare parts for a discontinued piece of manufacturing equipment C Since the equipment is discontinued, its spare parts are likely to be slow moving. It must also be assumed that the parts are low cost. Bolts and washers C Extremely low unit cost. Subassemblies A or B C Could be either depending on whether they are used in a large number of products or as a specialty item. If they have very low cost. Imported SKUs for resale A, B or C Could be any based upon assumptions. Motor oil B Assuming the product is stocked at a company that deals in auto accessories, it will be characterized by high usage but moderate cost. Perishable food stuffs A Special attention due to perishable nature. A Right Handed PS-37R-01 A or C Assuming that the item is not frequently demanded, its value would determine its category. Widget invented by the company owner’s nephew A Assuming your job depends on having this item in stock. Platinum bushings A Extremely high cost. A camera valued at $30,000 but with a sale of 2 per year A Extremely high cost.
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2. An important problem in the operation of a retail store is the allocation of limited shelf space among a wide variety of products.
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