L. Houts Plastics is a large manufacturer of injection-molded plastics in North
ID: 372386 • Letter: L
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
Item Code
Avg. Inventory (units)
Value
($/unit)
Dollar
Volume
% of Dollar Volume
12891289
360360
3.503.50
nothing
nothing
23472347
300300
4.004.00
1 comma 2001,200
38.1838.18
23492349
120120
2.502.50
300300
9.549.54
23632363
7070
1.801.80
nothing
nothing
23942394
6060
1.751.75
105105
3.343.34
23952395
3030
2.002.00
nothing
nothing
67826782
2020
1.151.15
2323
0.730.73
78447844
1212
2.052.05
2525
0.780.78
82108210
88
1.601.60
nothing
nothing
83108310
77
2.002.00
1414
0.450.45
91119111
66
3.003.00
1818
0.570.57
3 comma 1433,143
L. Houts Plastics Charlotte Inventory Levels
Item Code
Avg. Inventory (units)
Value
($/unit)
Dollar
Volume
% of Dollar Volume
12891289
360360
3.503.50
nothing
nothing
23472347
300300
4.004.00
1 comma 2001,200
38.1838.18
23492349
120120
2.502.50
300300
9.549.54
23632363
7070
1.801.80
nothing
nothing
23942394
6060
1.751.75
105105
3.343.34
23952395
3030
2.002.00
nothing
nothing
67826782
2020
1.151.15
2323
0.730.73
78447844
1212
2.052.05
2525
0.780.78
82108210
88
1.601.60
nothing
nothing
83108310
77
2.002.00
1414
0.450.45
91119111
66
3.003.00
1818
0.570.57
3 comma 1433,143
Explanation / Answer
We would follow following norms for purpose of A-B-C Classification :
All items measuring cumulative percentage of Dollar volume upto 80%= A class item
All items measuring cumulative percentage of Dollar volume from 80% upto around 95% = B class item
All items measuring cumulative percentage of Dollar volume from around 95% upto 100 % = C Class item
Accordingly:
There are 2 items under A class
3 items under B class
6 items under C class
Item code
Average inventory ( Values)
Value ($/ unit)
Dollar Volume
% of Dollar volume
Item Class
1289.00
360.00
3.50
1260.00
40.08
A
2347.00
300.00
4.00
1200.00
38.18
A
2349.00
120.00
2.50
300.00
9.54
B
2363.00
70.00
1.80
126.00
4.01
B
2394.00
60.00
1.75
105.00
3.34
B
2395.00
30.00
2.00
60.00
1.91
C
7844.00
12.00
2.05
24.60
0.78
C
6782.00
20.00
1.15
23.00
0.73
C
9111.00
6.00
3.00
18.00
0.57
C
8310.00
7.00
2.00
14.00
0.45
C
8210.00
8.00
1.60
12.80
0.41
C
TOTAL:
3143.4
100.00
Item code
Average inventory ( Values)
Value ($/ unit)
Dollar Volume
% of Dollar volume
Item Class
1289.00
360.00
3.50
1260.00
40.08
A
2347.00
300.00
4.00
1200.00
38.18
A
2349.00
120.00
2.50
300.00
9.54
B
2363.00
70.00
1.80
126.00
4.01
B
2394.00
60.00
1.75
105.00
3.34
B
2395.00
30.00
2.00
60.00
1.91
C
7844.00
12.00
2.05
24.60
0.78
C
6782.00
20.00
1.15
23.00
0.73
C
9111.00
6.00
3.00
18.00
0.57
C
8310.00
7.00
2.00
14.00
0.45
C
8210.00
8.00
1.60
12.80
0.41
C
TOTAL:
3143.4
100.00
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