Products
Rewards
from HOLOOLY

We are determined to provide the latest solutions related to all subjects FREE of charge!

Enjoy Limited offers, deals & Discounts by signing up to Holooly Rewards Program

HOLOOLY

HOLOOLY
TABLES

All the data tables that you may search for.

HOLOOLY
ARABIA

For Arabic Users, find a teacher/tutor in your City or country in the Middle East.

HOLOOLY
TEXTBOOKS

Find the Source, Textbook, Solution Manual that you are looking for in 1 click.

HOLOOLY
HELP DESK

Need Help? We got you covered.

## Q. 12.EX.2

CYCLE COUNTING AT COLE’S TRUCKS, INC.. Cole’s Trucks, Inc., a builder of high-quality refuse trucks, has about 5,000 items in its inventory. It wants to determine how many items to cycle count each day.
APPROACH $\blacktriangleright$ After hiring Matt Clark, a bright young OM student, for the summer, the firm determined that it has 500 A items, 1,750 B items, and 2,750 C items. Company policy is to count all A items every month (every 20 working days), all B items every quarter (every 60 working days), and all C items every 6 months (every 120 working days). The firm then allocates some items to be counted each day.

## Verified Solution

SOLUTION $\blacktriangleright$

 ITEM CLASS QUANTITY CYCLE-COUNTING POLICY NUMBER OF ITEMS COUNTED PER DAY A 500 Each month (20 working days) 500/20 = 25/day B 1,750 Each quarter (60 working days) 1,750/60 = 29/day C 2,750 Every 6 months (120 working days) 2,750/120 = 23/day 77/day

Each day, 77 items are counted.

INSIGHT $\blacktriangleright$ This daily audit of 77 items is much more efficient and accurate than conducting a massive inventory count once a year.
LEARNING EXERCISE $\blacktriangleright$ Cole’s reclassifies some B and C items so there are now 1,500 B items and 3,000 C items. How does this change the cycle count? [Answer: B and C both change to 25 items each per day, for a total of 75 items per day.]
RELATED PROBLEM $\blacktriangleright$ 12.4