Tutorial 8 - Exercises (Chapter 7 - Production Planning)

Operations Management
8. Tutorial: Production Planning – Exercises


Exercise 1: ABC Analysis

The RoboTec Inc. aims at reducing capital commitment costs in their warehouses. Therefore,
they need to check if procurement and storage of certain materials can be improved. The ABC
analysis shall be used to gain helpful information.
Material Required Unit Price
Material-ID
[piece/year] [euro]
MB 01 592 3.08
MB 02 425 11.27
MB 03 1723 13.43
MB 04 1053 3.14
MB 05 1887 1.92
MB 06 815 2.73
MB 07 1178 12.89
MB 08 472 45.79
MB 09 1630 6.38
MB 10 1761 6.00
a) Conduct an ABC analysis based on the given data. Please use the following class limits to
calculate the cumulated usage values: 0% ≤ A < 75%, 75% ≤ B < 90%, 90% ≤ C ≤ 100%.

Annual
Material Required Unit Price
Material-ID Consumption Rank
[piece/year] [€]
[€]
MB 01 592 3.08
MB 02 425 11.27
MB 03 1723 13.43
MB 04 1053 3.14
MB 05 1887 1.92
MB 06 815 2.73 2224.95 9
MB 07 1178 12.89 15184.42 3
MB 08 472 45.79 21612.88 2
MB 09 1630 6.38 10399.40 5
MB 10 1761 6 10566.00 4

, 2


Material Annual Usage Cumulative Class
ID Consumption Value Usage Value
[€] [%] [%]




MB 02 4789.75 4.95% 88.65%
MB 05 3623.04 3.75% 92.40%
MB 04 3306.42 3.42% 95.82%
MB 06 2224.95 2.30% 98.12%
MB 01 1823.36 1.89% 100.01%
Total


Material Material Required % of Total Cumulative % of
ID [pieces] Number of Items Total Number of Items
[%] [%]

MB 03 1723
MB 08 472
MB 07 1178
MB 10 1761
MB 09 1630
MB 02 425 3.68% 62.32%
MB 05 1887 16.36% 78.68%
MB 04 1053 9.13% 87.80%
MB 06 815 7.06% 94.87%
MB 01 592 5.13% 100.00%
Total