Questions to consider:
1. How would you characterize Steel Works harvest-tides? What about Steel Works customers?
2. What does the coefficient of magnetic variation tell us? Can you determine the coefficient of variation for the product lines?
3. How a great deal inventory has Steel Works been holding? How much should they convey been holding?
SPECIALTY PRODUCTS DIVISION
Customer Characteristics
Steel Works has a large consequence of customers for its specialty products - 130 customers for some 120 products. However, majority of these customers (82.3%) be small-sized customers with less than $1million in sales. For example, using data from Spreadsheet S0121958, we see that there is only one major customer, C194, demanding considerable volume of DuraBendTM R12, comparatively to other customers.
Given the large number of customers and the large variability in demand (80% of all specialty products had coefficient of variation greater than 0.5), it is soothe to see that Steel Works has made use of risk-pooling to strike down the variability of overall inventory demand for each product. Therefore, although it is all-important(prenominal) to concentrate efforts on the big customers that bring in to a greater extent than $24 million in sales each, it is not well(predicate) that Steel Works neglect the smaller-sized customers.
Products Characteristics
As seen from Table 1, DuraBendTM R15 & R12 have very high impact on the annual taxation since they have very high demand and medium marketing prices.
The kink in Chart 1 tells us where products should be classified; in this case, we will divide them into two classes.
Table 1: Percentage of Annual Value for Each Product ($ in thousand)
Product
DuraBendTM R15
DuraBendTM R12
DuraFlexTM R10
DuraFlexTM R15
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