Southern Markets, Inc., is considering the use of ABC analysis to focus on the most critical SKUs in its inventory. Currently, there are approximately 20,000 different SKUs with a total dollar usage of $10,000,000 per year.
a. What would you expect to be the number of SKUs and the total annual dollar usage for A items, B items and C items at Southern Markets, Inc.?
b. The following table provides a random sample of the unit values and annual demands of eight SKUs.

Categorize these SKUs as A, B, and Citems.

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SKU Code A104 D205 X104 U404 L205 S104 X205 し104 Unit Value $2.10 $2.50 $0.85 $0.25 $4.75 Demand (Units) 2,500 30 350 250 20 4.000 1,020 50 $0.35 $4.25