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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