In the past, Taylor Industries has used a fixed?time period inventory system tha

Question

In the past, Taylor Industries has used a fixed?time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.

   

What would you recommend Taylor do to cut back its labor cost? (Illustrate using an ABC plan.)

  

ITEM
NUMBER ANNUAL
USAGE ITEM
NUMBER ANNUAL
USAGE 1 $ 2,600    11 $ 27,100    2 33,100    12 23,100    3 34,100    13 3,800    4 97,100    14 29,100    5 1,200    15 2,700    6 100,100    16 3,700    7 900    17 29,600    8 33,600    18 22,100    9 1,000    19 2,800    10 98,100    20 1,900   

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