HW4S - ISE 410 Homework # 4 Due on 10/24/06 1. Assuming...

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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. a) Discuss how demand is influenced by the allocation. Can individual items be treated separately? The relationship between the amount of shelf space allocated and the demand for a
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This note was uploaded on 10/26/2008 for the course ISE 410 taught by Professor Dessouky during the Fall '07 term at USC.

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HW4S - ISE 410 Homework # 4 Due on 10/24/06 1. Assuming...

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