Case Questions

MAQ Corporation

“Rene Corp. Ltd., a major producer of consumer electronics equipment, is currently faced with a rapidly growing product line and its associated inventory problems. Rene’s CEO, Abimbola Adebayo, decided to start a program to analyse the company’s inventory requirements utilizing different inventory techniques. The first phase of this program consists of an ABC analysis of the company’s product line (shown in the following table). Mr. Adebayo has encountered difficulties in deciding on the appropriate criteria to use in the classification and in developing appropriate cut-off levels for each class of inventory. To solve his dilemma, Mr. Adebayo has contracted the services of a logistics consulting firm to perform the inventory analysis.” 

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Sales Data (One-year Period)

PRODUCT #Unite SoldPrice Per Unit ($)Profit Per Unit ($)
SR1011400024560
SR1037001550320
SR105150062090
SR201402300860.50
SR2031035001650
SR2059350510120
SR301750650195
SR303600710198
SR3053200930302.60
SR5001201200442

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