Most critical items in inventory

Question

Problem:

Stock-Rite, Inc is considering the use of ABC analysis to focus on the most critical items in its inventory. For a random sample of eight items, the following table shows the item's unit value and annual demand. Categorize these items as A, B and C classes.

Item code    Unit value    Demand(unit)

A104    $40.25                  80
D205      80.75                120
X104      10                     150
U404      40.5                  150
L205      60.7                    50
S104      80.2                    20
X205      80.15                  20
L104       20.05                100