Wheeled Coach implements ABC analysis.

A firm using the ABC system segregates its inventory into three groups, A, B, and C. The A group constitutes the most costly or slowest turning items of inventory. It approximates 10% of the inventory items that account for 70% of the firm's investment. The B. group is the next largest amount of investment and consists of 20% of the items accounting for about 20% of the firm's investment. The C. group is the largest group of cheapest material consisting of about 70% of the firm's times and accounts for about only 10% of the firm's investment. Washers, screws, and nails would, for instance, be in this group.

As regards Wheeled Coach, the 'A' items are the expensive items such as the chassis (usually purchased from Ford), aluminum (from Reynolds Metal), and plywood used for flooring and cabinetry (from local suppliers). These few items are...
[ View Full Essay]