Question: Your manager asked you to categorize the five inventory items carried in your store. The annual volume (units) as well as the unit cost are
Your manager asked you to categorize the five inventory items carried in your store. The annual volume (units) as well as the unit cost are provided for these items (P1, P2, P3, P4, P5):
| Item | Annual volume (units) | Unit cost ($) |
| P1 | 400 | 30 |
| P2 | 75 | 100 |
| P3 | 50 | 50 |
| P4 | 100 | 100 |
| P5 | 250 | 90 |
You decide to make an ABC analysis based on annual dollar volume. Which item would you consider to be the most critical?
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