What is ABC Analysis? In what type of inventory control requirement is it used? Entry posted by umama · September 24, 2015 25,056 views Share Followers 2 What is ABC Analysis? In what type of inventory control requirement is it used? Juned Patel, Shubham Ajable and prafful 3 Report Entry
DrD 846 Posted September 26, 2015 Report I have to say, I don't understand what the pictorial is saying. I think some words could help a lot here.DrD Quote Link to comment
Konda Reddy Gondi 1 Posted September 27, 2015 Report ABC IS ALWAYS BETTER CONTROLIT CAN APPLIED IN ANY ORGANIZATION TO PROCURE ITEMS FROM STATIONARY LIKE A PIN TO A BIG MACHINARY EQUIPMENT. Rumon Akanda 1 Quote Link to comment
DrD 846 Posted September 27, 2015 Report Always Better Control sounds more like an advertising slogan than an actual description of a process. It tells nothing at all about how the process works, why it is better, or anything to make another person believe it is really better. Poor name choice!Also, I still have no idea what the graphic is showing. This is not a very good post when so very much clarification is required. kajel raj and Thajudheenvs Vs 2 Quote Link to comment
umama 176 Posted September 27, 2015 Report The first step in determining an inventory situation is to use a technique called ABC analysis. It is an inventory control method based upon a statistical principle discovered by a 19th century economist, Vilfredo Pareto. He observed that a small number of situations in a population would often dominate the results achieved. Therefore, controlling the vital few would go a long way to controlling the whole. This observation is known as the “Management Principle of Materiality” and is recognized today as Pareto’s Law.When ABC analysis is applied to an inventory situation, it determines the importance of items and the level of controls placed on the item. By dividing a company’s inventory into different classifications– A, B, C; managers can focus on the items that account for the majority of the inventory. The adaptation of Pareto’s Law of the vital few and trivial many follows a pattern: A inventory accounts for about 20% of the items and 80% of the dollar usageB inventory accounts for about 30% of the items and 15% of the dollar usageC inventory accounts for about 50% of the items and 5% of the dollar usage ‘A’ items have tighter controls on inventory records and more frequent reviews of forecasting, demand requirements, order quantities, safety stocks, and cycle counts.‘B’ items have similar controls to ‘A’ items but reviews are less frequent.‘C’ items have the simplest controls. They are only important if there is a shortage of one of them. Thus, ‘C’ items can be ordered in larger quantities and have higher safety stocks.ABC analysis puts emphasis on “where the value is”. By focusing efforts on higher value inventory, a company can assign proper resources to attain the optimum inventory levels, reducing inventory costs, and ensuring customers’ needs are met. Rajka, Mostafa Al Nukta, kajel raj and 5 others 8 Quote Link to comment
saurabhjain 2,288 Posted November 18, 2015 Report Thx @umama for the wonderful explanation Quote Link to comment
Venkateswara Yadav Gompa Baba 0 Posted November 20, 2015 Report Very clearly explaned by umama, thank you for it. Percentages of allocation may change based on company discretion." A" class items are selected by auditors every time they audit. Keep strong track of it will be a calm environment in stores else will be treated as hanky panky or some thing a wrong management. Most numbers consumed may be C class inventory items during the period are another track items even if they are less cost. Quote Link to comment
Thajudheenvs Vs 13 Posted December 4, 2015 Report ABC analysis helps to know the stock level of inventory and helps to reduce dead money Nitish Nikam 1 Quote Link to comment
Omar Eyad 3 Posted December 12, 2016 (edited) Report You can enter into screen: ABC analysis wizard from the following steps: Microsoft dynamics GP menu >>> Tools >>> Routines >>> Inventory >>> Item ABC analysis . This screen will help you to make analysis on any item also you can use any way that you want. Edited December 12, 2016 by Omar Eyad Quote Link to comment
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