Task Session 3

Task 1: ABC Analysis and Slotting Strategy

This task is designed to assess Competency 5: Inventory and Warehouse Layout. It requires applying the ABC analysis model to a dataset and then translating the results into a physical storage strategy.

Scenario

You have been provided with the following inventory data for a small set of products. Your goal is to classify these items and propose a slotting plan to improve picking efficiency.

SKU

Description

Annual Sales (Units)

Cost per Unit ($)

SKU-101

Industrial Gloves

2,500

$15.00

SKU-102

Safety Glasses

8,000

$5.00

SKU-103

Hard Hat

600

$25.00

SKU-104

Steel-toe Boots

250

$120.00

SKU-105

Ear Plugs (Box of 200)

10,000

$8.00

SKU-106

High-Visibility Vest

7,500

$10.00

SKU-107

Respirator Cartridge

1,200

$40.00

SKU-108

Work Jeans

300

$55.00

Assignment

Perform ABC Analysis:
- Calculate the Annual Consumption Value ( $ACV$ ) for each SKU ( $ACV=\text{Annual Sales} * \text{Cost per Unit}$ ).
- Rank the SKUs from highest to lowest $ACV$ .
- Calculate the cumulative percentage of the total $ACV$ for the ranked list.
- Classify each SKU as 'A', 'B', or 'C' based on the typical Pareto distribution (e.g., A ≈ top 80% of $ACV$ , B ≈ next 15%, C ≈ final 5%). Present your final classified list in a table.
Develop a Slotting Plan:
- Assume you have a single picking aisle with shelves at three vertical levels: Bottom (requires bending), Middle ("golden zone," waist-to-shoulder height), and Top (requires reaching). The aisle begins near the packing station.
- Create a proposal that assigns each SKU to a general location (e.g., "Middle shelf, front of aisle," "Bottom shelf, back of aisle").
- Justify your slotting decisions for the 'A' items and 'C' items, explaining how your plan reduces travel time and improves ergonomics for the pickers.