The NextGen distribution is working on improving inventory management by performing an ABC Analysis. The management team considers the following factors for the analysis: hits and criticality to operations. The criticality to operations has been calculated using the Analytical Hierarchy Process (AHP) by an outside consultant, Given the initial ABC categories combine these two categories to come up with the final classification. Assume A item is 5, B is 4, and C is 1 point. And criticality is three times as important as hits. Finally, top 70% is a next 25 %B and the rest are C items. (Use three decimal place accuracy for ratio and cumulative ratio calculations when needed, e.g., 0.123) a. Perform the final ABC Analysis by combining hits and criticality. Item 1 2 3 4 5 6 7 8 9 10 Hits A C B A C C C B B A Criticality B B C B A B A A
The NextGen distribution is working on improving inventory management by performing an ABC Analysis. The management team considers the following factors for the analysis: hits and criticality to operations. The criticality to operations has been calculated using the Analytical Hierarchy Process (AHP) by an outside consultant, Given the initial ABC categories combine these two categories to come up with the final classification. Assume A item is 5, B is 4, and C is 1 point. And criticality is three times as important as hits. Finally, top 70% is a next 25 %B and the rest are C items. (Use three decimal place accuracy for ratio and cumulative ratio calculations when needed, e.g., 0.123) a. Perform the final ABC Analysis by combining hits and criticality. Item 1 2 3 4 5 6 7 8 9 10 Hits A C B A C C C B B A Criticality B B C B A B A A
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...
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