B). What is the basic premise of ABC analysis? What are the three steps in making an ABC inventory analysis?

C). Annual purchasing salaries are $65,000, operating expenses for the purchasing department are $25,000, and inspecting and receiving costs are $25 per order. If the purchasing department places 9,000 orders a year, what is the average cost of ordering? What is the annual cost of ordering?

D). Analyse the following data to produce an ABC classification based on annual dollar usage.

Part number	Annual unit usage	Unit cost $	Annual $ usage
1	200	$10
2	17000	$4
3	60000	$6
4	15000	$15
5	1500	$10
6	120	$50
7	25000	$2
8	700	$3
9	25000	$1
10	7500	$1
Total