Question

Assignment 5 Inventory Controls

Scenario:

As the manager of a large distribution centre, you are responsible for conducting an annual inventory count. The DC maintains 13000 SKU’s with a total value of $4,250,000.00 on the day of the inventory. Annual sales are $28,000,000.00. The ABC analysis has A items at 10% with 80% of the value, B is 10% items with 10% of the value and C items constitute the balance. Inventory carrying cost is 20%. All items are maintained on shelving designed to be picked from both sides. Items are placed on the shelves according to a random numbering system.

Instructions:

1.-Determine the value and quantity of A, B and C items.

2.-What is the carrying cost of inventory and identify 5 examples that would be included in the cost and how many inventory turns occur during the year.

3.-Define the process you would use to conduct the inventory count.

Answer 1

The answer has been presented in the supporting sheet. All the 3 parts has been solved with detailed explanation. For solution refer the supporting sheets.