HW 12 - 12.2You decide that the top 20 of the 10 items...

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12.2 You decide that the top 20% of the 10 items, based on a criterion of demand times cost per unit, should be A items. (In this example, the top 20% constitutes only 58% of the total inventory value, but in larger samples the value would probably approach 70% to 80%.) You therefore rate items F3 and G2 as A items. The next 30% of the items are A2, C7, and D1; they represent 23% of the value and are categorized as B items. The remaining 50% of the items (items B8, E9, H2, I5, and J8) represent 19% of the value and become C items. Annual  Item Demand Cost ($) Demand  ×  Cost Classification  A2 3,000      50 150,000 B  B8 4,000      12   48,000 C  C7 1,500      45   67,500 B  D1 6,000      10   60,000 B  E9 1,000      20   20,000 C  F3    500    500 250,000 A  G2    300 1,500 450,000 A  H2    600      20   12,000 C  I5 1,750      10   17,500 C  J8 2,500        5   12,500 C
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12.3 Inventory  Item $Value  per  Case   #Ordered    per    Week Total $  Value/Week (52 Weeks)  Total ($*Weeks)    Rank Percent of  Inventory Cumulative  Percent of  Inventory Fish filets  143 10 $1,430 $74,360 1 17.54% 34.43% French fries 43 32 $1,376 $71,552 2 16.88% 47.31% Chickens 75 14 $1,050 $54,600 3 12.88% 59.53% Prime rib 166 6 $996 $51,792 4 12.22% 69.83% Lettuce (case) 35 24 $840
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