A leading automobile company based in Japan, which makes automobile parts has the following average annual...
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A leading automobile company based in Japan, which makes automobile parts has the following average annual inventory level, as given in Table T2 a. To have a more proper control over the inventory the company needs to do A-B-C analysis based on the annual consumption value. Item Chassis Axle Clutch Steering wheel Brake pad Head light Dashboard Mud flap Wheels Front bumper Machine screw Rear bumper Annual Number of Cost per Unit Units Sold (*) 58.50 34.80 16.60 43.60 11.00 27.00 38.00 9.40 25.40 47.00 6.50 44.00 36,000 89,000 47,000 21,000 40,000 60,000 20,000 12,000 103,000 18,000 22,000 12,000 Annual Consumption Value (2) 2,106,000.00 3,097,200.00 b. Prepare a Pareto Chart with the above information. 780,200.00 915,600.00 440,000.00 1,620,000.00 760,000.00 112,800.00 2,616,200.00 846,000.00 143,000.00 528,000.00 Table T2a - Average Annual Inventory a. Classify the inventory based on the A-B-C analysis and classify the items based on 70-20- 10 rule. (10 Marks) (05 Marks) c. Suggest 5 benefits of using ABC analysis for your inventory management with clear justification. (10 Marks) A leading automobile company based in Japan, which makes automobile parts has the following average annual inventory level, as given in Table T2 a. To have a more proper control over the inventory the company needs to do A-B-C analysis based on the annual consumption value. Item Chassis Axle Clutch Steering wheel Brake pad Head light Dashboard Mud flap Wheels Front bumper Machine screw Rear bumper Annual Number of Cost per Unit Units Sold (*) 58.50 34.80 16.60 43.60 11.00 27.00 38.00 9.40 25.40 47.00 6.50 44.00 36,000 89,000 47,000 21,000 40,000 60,000 20,000 12,000 103,000 18,000 22,000 12,000 Annual Consumption Value (2) 2,106,000.00 3,097,200.00 b. Prepare a Pareto Chart with the above information. 780,200.00 915,600.00 440,000.00 1,620,000.00 760,000.00 112,800.00 2,616,200.00 846,000.00 143,000.00 528,000.00 Table T2a - Average Annual Inventory a. Classify the inventory based on the A-B-C analysis and classify the items based on 70-20- 10 rule. (10 Marks) (05 Marks) c. Suggest 5 benefits of using ABC analysis for your inventory management with clear justification. (10 Marks)
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Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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