The Owner of a Garden Supply Store Was Wondering If

Essay

The owner of a garden supply store was wondering if they could manage their inventory better. She decided to develop an ABC classification system to help manage the inventory. The company's inventory consists of the following items:
$$\begin{array} { c c c } \text { Garden Tool } & \text { Cost } & \text { Quarterly Demand units) } \\\hline \text { Shovel } & 5500 & 1,000 \\ \text { Edger } & \$ 25.00 & 6 \\ \text { Weeder } & \$ 6.00 & 400 \\\text { Hose } & \$ 20.00 & 800 \\ \text { Cutters } & \$ 4.00 & 100 \\ \text { Sprinkler } & \$ 7.00 & 800 \\ \text { Hedge Trimmer } & \$ 5.00 & 5,000 \\ \text { Spreader } & \$ 15.00 & 6 \\ \text { Sprayer } & \$ 12.00 & 20 \\ \text { Clippers } & \$ 8.00 & 15 \\\end{array}$$
a. Compute the total dollar value of each of the ten inventory items. What is the total value of all the inventory items?
b. Which items should be declared "A" items? What percentage of total inventory value does your "A" group represent? What percentage of the total number of inventory items does your "A" group represent?
c. Which items should be declared "B" items? What percentage of total inventory value does your "B" group represent? What percentage of the total number of inventory items does your "B" group represent?
d. Which items should be declared "C" items? What percentage of total inventory value does your "C" group represent? What percentage of the total number of inventory items does your "C" group represent?