Question

ABC Inventory Template

Perform an ABC inventory analysis on the data in the ABC Assessment Problem Data handout using the ABC Inventory Template.

Write a 100-word summary of the inventory items that are A items, B items, and C items for this company

Item No.	Units	Unit Price
1	2400	19.51
2	6200	32.60
3	8500	10.20
4	3200	6.80
5	6000	4.50
6	750	55.70
7	8200	3.60
8	9000	44.90
9	5800	35.62
10	820	82.60
11	500	40.50
12	2000	15.40
13	2400	14.60
14	6300	35.80
15	4750	17.30
16	2700	51.75
17	1600	42.90
18	1350	25.30
19	5000	67.00
20	1000	125.00

Answer 1

There are three categories under ABC analysis.

Category A

A items are those items who have more value and quantity is low .
Item no. 8,19,14 and 9 are in category A because they represent around 33% in quantity, however, their value is around 53%. A company should keep a close eye on them.

Category B

B items are those items whose percentage of value and percentage of quantity is almost the same. Here, Item 2,16,20,3 and 15 are category B because their percentage value is 29% and percentage quantity is 30%. A company should review them regularly.

Category C

Rest all items fall under this category because their percentage of value is low and the percentage of quantity is high. Here, these items represent 19% value and 37% in quantity. Therefore, a company should review then infrequently.

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