Perform an ABC analysis on the following set of products

Item Annual Demand Unit Cost
A211 1200 $9
B390 100 $90
C003 4500 $6
D100 400 $150
E707 35 $2000
F660 250 $120
G473 1000 $90
H921 100 $75

What will be an ideal response?

The table below details the contribution of each of the eight products. Item G473 is clearly an A item, and items A211, B390, and H921 are all C items. Other classifications are somewhat subjective, but one choice is to label E707 and D100 as A items, and F660 and C003 as B items.

Item Annual Demand Unit Cost Volume Cumulative volume Cumulative percent
G473 1000 $90 $90,000 $90,000 29.6%
E707 35 $2,000 $70,000 $160,000 52.6%
D100 400 $150 $60,000 $220,000 72.3%
F660 250 $120 $30,000 $250,000 82.2%
C003 4500 $6 $27,000 $277,000 91.0%
A211 1200 $9 $10,800 $287,800 94.6%
B390 100 $90 $9,000 $296,800 97.5%
H921 100 $75 $7,500 $304,300 100.0%
$304,300