The manager of an automobile repair shop hopes to acheieve a better allocation of inventory control efforts by adopting an A-B-C approach to inventory control.
a. Given the monthly usages in the following table, classify the items in A, B, and C categories according to dollar usage.
Item Usage Unit Cost
4021 50 $1,400
9402 300 12
4066 30 700
6500 150 20
9280 10 1020
4050 80 140
6850 2000 10
3010 400 20
4400 5000 5
b. Determine the percentage of items in each category and the annual dollar value for each category.