WEEK 18 - FINAL EXAMINATION

12 DECEMBER 2023

PROBLEM SCENARIO:

A newly graduate Operations Management student was hired with a manufacturer company and on his firs
day of work, his immediate supervisor tasked this newbie to organize and identify the incoming deliver of
raw materials. His supervisor handed the newbie the list of raw materials with data showing its annual
demand and unit costs as shown in the table below. He wants it to identify using the ABC analysis.
He wants the following information to be determined, as follows:
1. Annual Pesos Value
2. Sort the raw materials from highest to lowest
3. Percentage of Total Value
4. Cumulative Percentage of Total Value
5. Classification

Annual peso value

ITEM ANNUAL DEMAND UNIT COST

C300 400 ₱ 1,250.00 ₱500,000.00
B300 500 ₱ 1,193.00 ₱596,500.00
A200 1,000 ₱ 800.00 ₱800,000.00
F200 2,000 ₱ 88.00 ₱176,000.00
E800 3,000 ₱ 65.50 ₱196,500.00
G200 9,000 ₱ 55.00 ₱495,000.00
E350 6,000 ₱ 25.50 ₱153,000.00
D700 7,000 ₱ 15.00 ₱105,000.00
F400 5,000 ₱ 12.00 ₱60,000.00
G100 8,000 ₱ 6.00 ₱48,000.00
C100 10,000 ₱ 3.50 ₱35,000.00
D400 2,000 ₱ 2.50 ₱5,000.00
A100 20,000 ₱ 1.10 ₱22,000.00
₱3,192,000.00

Annual peso value

ITEM ANNUAL DEMAND UNIT COST
A200 1,000 ₱ 800.00 ₱800,000.00
B300 500 ₱ 1,193.00 ₱596,500.00
C300 400 ₱ 1,250.00 ₱500,000.00
G200 9,000 ₱ 55.00 ₱495,000.00
E800 3,000 ₱ 65.50 ₱196,500.00
F200 2,000 ₱ 88.00 ₱176,000.00
E350 6,000 ₱ 25.50 ₱153,000.00
D700 7,000 ₱ 15.00 ₱105,000.00
F400 5,000 ₱ 12.00 ₱60,000.00
G100 8,000 ₱ 6.00 ₱48,000.00
C100 10,000 ₱ 3.50 ₱35,000.00
A100 20,000 ₱ 1.10 ₱22,000.00
D400 2,000 ₱ 2.50 ₱5,000.00
₱3,192,000.00
r company and on his first
y the incoming deliver of
ta showing its annual
the ABC analysis.

Classifica
Percentage Cumulative tion
of total percentage of
value total value Percent
15.66% 15.66%
18.69% 34.35%
25.06% 59.41%
5.51% 64.92% 35.26%
6.16% 71.08%
15.51% 86.59%
4.79% 91.38%
3.29% 94.67% 7.77%
1.88% 96.55%
1.50% 98.05%
1.10% 99.15%
0.16% 99.31%
0.69% 100.00% 100.69%
100.00% 143.72%

Percentage Cumulative Classifica

of total percentage of tion
value total value Percent
25.06% 25.06% A
18.69% 43.75% A
15.66% 59.41% A
15.51% 74.92% A
6.16% 81.08% B
5.51% 86.59% B
 4.79% 91.38% B
3.29% 94.67% B
1.88% 96.55% C
1.50% 98.05% C
1.10% 99.15% C
0.69% 99.84% C
0.16% 100.00% C
100.00% 0.00%