HEC Electronicsproduces 10 different microprocessors to be used by Medtronic. HEC Electronics lacks sufficient personnel in its inventory supply section to closely control each item stocked. Currently, the existing personnel can review the inventory once a week for at most 5 SKUs (i.e., stock keeping units) and once a month for at most another 5 SKUs. HEC Electronics considers investing in the technology that provides real-time inventory information. However, the budget allows to invest in that technology only for 2 SKUs. As the inventory manager, you are asked to determine how to allocate the inventory control resources across all SKUs. The data about inventory records is provided in "HEC Electronics.xlsx".

i. Using the inventory records data, develop an ABC classification for HEC Electronics. Use thresholds of around 70%, 25%, and 5% for A, B, and C items, respectively. (5 points)

ii. What would you recommend HEC Electronics for controlling inventory? (5 points)

SKU	Average monthly demand	Price per unit
10001	700	$ 6.00
10002	200	$ 4.00
10003	2000	$ 12.00
10004	1100	$ 20.00
10005	4000	$ 21.00
10006	100	$ 10.00
10007	3000	$ 2.00
10008	2500	$ 1.00
10009	500	$ 10.00
10010	1000	$ 2.00