1) Use the guidance given in exhibit 29.2 (ABC Classification Guidance) to conduct an ABC Analysis on the items listed in exhibit 29.2 (Form Inventory Data for SICU). What is the value in doing an ABC Analysis (Give a full description and purpose for ABC Analysis). (Show all elements of the formulas used and the meaning of each) Example: Calculate dollar usage by: (Average annual usage x Unit Cost).

EXHIBIT 29.2 Clarinda Community Hospital: ABC Classification Guidance Inventory Inventory Classification Value 60-70% 20-30% 10-20% Amount 10-20% 30-40% 50-60% EXHIBIT 29.2 Clarinda Community Hospital: Form Inventory Data for SCIU Supplier A Units Used Total Costs %of Cummulative Value ABC Classification SKU # Unit Size Unit Cost Annuall 5 28 10 83 279 10 92 Total $0.00