L. Houts Plastics is a large manufacturer of injection-molded plastics in North

Question

L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system?

(Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.)

L. Houts Plastics Charlotte Inventory Levels Value (S/unit) 3.50 4.00 2.50 1.80 1.75 2.25 1.15 2.05 2.00 2.00 3.00 Dollar Volume % of Dollar Volume Item Code Avg. Inventory (units) 1289 2347 2349 2363 2394 2395 6782 7844 8210 8310 9111 360 300 120 65 60 25 20 12 1,200 300 38.37 9.59 105 3.36 23 25 0.74 0.79 7 0.45 0.58 18 3,128

Explanation / Answer

Below is the filled table -

Based on the percentages of dollar volume, item number 1289 should be classified as A

Item number 2349 should be classified as B

Item number 8210 should be classified as C

Item code Avg. Inv(units) Value($/unit) Dollar Volume % of Dollar Volume 1289 360 3.5 1260 40.28 2347 300 4 1200 38.37 2349 120 2.5 300 9.59 2363 65 1.8 117 3.74 2394 60 1.75 105 3.36 2395 25 2.25 56 1.79 6782 20 1.15 23 0.74 7844 12 2.05 25 0.79 8210 5 2 10 0.32 8310 7 2 14 0.45 9111 6 3 18 0.58 Sum 3128 100

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