Lincoln Machine Tool Company Maintains an Inventory Pool Consisting of 10

question 2

Essay

Lincoln Machine Tool Company maintains an inventory pool consisting of 10 items.Each of these items has a unique demand pattern and may require a different kind of inventory management system.The annual demand pattern and the unit cost of these items are given in the following table.Conduct an ABC inventory analysis and classify these items into A,B,and C type of inventories.Suggest suitable methods for managing these three distinct types of inventories:

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Definitions:

Deduct Business Losses

The process of reducing taxable income by the amount of losses incurred by a business during a financial period.

Charging-Order Creditor

A creditor's legal right to attach a debtor's interest in an LLC or partnership, as a means to satisfy the debtor's outstanding obligation.

Lien Creditor

A creditor who has a legal right or claim against a debtor's property as security for a debt or charge.

Partnership Distributions

The sharing out of profits, assets, or earnings among the partners of a partnership based on the agreed-upon terms.