Your company has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on the data. Over which product do you suggest the firm keep the tightest control?

Unit Cost SKU Annual Demand

$25 R11 125

$90 S22 55

$500 T33 100

$550 U44 150

$4 V55 2000

a) S22

b) R11

c) U44

d) V55

e) T33

c) U44

Explanation:

The computation is shown below:

A B (A * B) (dollar value : total dollar value)

Unit Cost SKU Annual Dollar Dollar

Demand value Percentage

$25 R11 125 $3,125 2.1

$90 S22 55 $4,950 3.3

$500 T33 100 $50,000 33.65

$550 U44 150 $82,500 55.53

$4 V55 2000 $8,000 5.38

$148,575 100

As we can see from the above calculation, the u$4 has tighest control as it shows the high dollar percentage if we compared with others

hence, the correct option is c.