SB Furniture Specialist has compiled the following list of 8 items in inventory along with the…

  1. SB Furniture Specialist has compiled the following list of 8 items in inventory along with the unit cost and annual volume demand. Use ABC analysis to determine which item(s) should be carefully controlled using a quantitative inventory technique (6 Marks):
  2. Cycle counting is used to eliminate annual inventory adjustments and to identify any cases of error. SB furniture specialties have a policy of counting Class A items every 40 days, Class B items every 100 days, and Class C items every 160 days . Based on the classification above, determine how many items need to be counted each day using the Cycle counting technique
  3. Item class

    Quantity

    Cycle Counting policy

    Number of items counted per day

    A

    B

    C

Item

Annual Volume

Unit cost

Annual $ volume

%age of total annual % volume

category

Window SB201

1100

87

Window B221

600

150

Door Handles

1450

15

Window KR987

450

40.5

Window T201

1100

10.5

Curtain Hooks

700

12.5

Curtains B6 screws

2300

0.6

Handle door lock

200

4.5

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