The following table contains the monthly usage and unit costs for a random sample of 15 items from a list of 2,000 inventory items at a health care facility.

a. Develop an A-B-C classification for these items.
b. How could the manager use this information?
c. After reviewing your classification scheme, suppose that the manager decides to place item P05 into the A category. What are some possible explanations for this decision?

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Monthly Usage ltem K34 K35 K36 M10 M'20 Z45 F14 F95 F99 D45 D48 D52 DS7 N08 PO5 Unit Cost 25 36 1o 20 80 20 30 20 10 12 15 40 30 6 200 600 150 25 80 700 300 800 60 550 90 110 120 40 500 9