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Material Title: Assignment Questions

Question 1

NANSAK Trading maker of super-fast DRAM chips, has organized its 10 inventory items on an annual cost-volume basis. Table below shows the items (identified by item number and part number), their annual demands, and unit costs. How should the company classify these items? into groups A, B, and C?  use spread sheet to answer this question.

Item N umber Part Number AnnualVolume (units)Unit Cost(GHc)
Item 110361008.5
Item 213071,2000.42
Item 3102861,00090
Item 4105001,00012.5
Item 5105722500.6
Item 61086735042.86
Item 711526500154
Item 81257260014.17
Item 9127601,55017
Item 10140752,0000.6
  1. Using the Parato Principles, Classify the items into A, B and C 
  • Discuss the applications of ABC analysis in various management areas.

Question 2

  1. . Briefly explain the characteristics of ‘A’ category inventory items under ABC analysis.

B. Discuss the Pareto principle on the basis of which ABC classification technique is developed. – 7 Marks

Question 3

Suppose you are the inventory manager of a firm dealing in dairy products. what would be your priority objectives of managing the inventory of dairy products and the factors that will underpin you inventory policies.

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