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): Unit cost ($) 30 100 Item Annual volume (units) P1 300 P2 75 P3 50 P4 100 P5 200 50 80 90 You decide to make an ABC analysis based on annual dollar volume. Which item would you consider to be the most critical? A. P1 since it has the highest annual unit volume B. P5 since it has the highest annual unit volume C. P2 since it has the highest unit cost OD. P1 since it has the highest annual dollar volume E. PS since it has the highest annual dollar volume Your company uses electrical assemblies to produce an array of small appliances. One of the high cost /high volume assemblies, the XM1, has an estimated annual demand of 5800 units. You estimate that the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year. What is the annual ordering cost if you use the economic order quantity? A. 3406 B. 1703 C. 452 D. 170 E. 345

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