Scribd
Upload
35 views8 pages

Presented by Anuj Goyal Anup Kumar Behera Anupam Singh Anurag Tripathi

ABC analysis is a method of inventory control that divides inventory items into three categories - A, B, and C - based on their annual consumption. Class A items account for 10% of inventory items but 70% of annual consumption. Class B items are 20% of items and 20% of consumption. Class C items are 70% of items but only 10% of consumption. The analysis provides a way to prioritize inventory control efforts based on consumption, with strict controls for A items, moderate for B, and loose for C. To perform ABC analysis, annual usage quantities and costs are determined for each inventory item and they are ranked to assign them to category A, B, or C.

Uploaded by

vampiredevil
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
35 views8 pages

Presented by Anuj Goyal Anup Kumar Behera Anupam Singh Anurag Tripathi

ABC analysis is a method of inventory control that divides inventory items into three categories - A, B, and C - based on their annual consumption. Class A items account for 10% of inventory items but 70% of annual consumption. Class B items are 20% of items and 20% of consumption. Class C items are 70% of items but only 10% of consumption. The analysis provides a way to prioritize inventory control efforts based on consumption, with strict controls for A items, moderate for B, and loose for C. To perform ABC analysis, annual usage quantities and costs are determined for each inventory item and they are ranked to assign them to category A, B, or C.

Uploaded by

vampiredevil
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 8

Presented by Anuj Goyal Anup Kumar Behera Anupam Singh Anurag Tripathi

Introduction
One of the Methods of Inventory/Material Control.
Based on the model that only a small number of

inventory items consume a very large share of inventory consumption during the year.

What is ABC analysis?


Divides total inventory into 3 types of classes A,B and

C based on consumption ratio. Class A consist of those inventory where 10 % of items have 70% of the annual inventory consumption. Class B consist where 20 % of item have 20 % of annual inventory value. Class C consist where 70 % of item have 10 % of annual inventory value.

Advantages of ABC analysis


A Class Items (High Consumption Value) Very Strict Control Handled by senior officers Accurate forecast in material planning B Class Items (Moderate Consumption Value) Moderate Control Handle by middle management Estimates based on past date C Class Items (Low Consumption Value) Loose Control Can be fully delegated Rough Estimates for planning Quarterly control reports

Weekly control statements Monthly control reports

How to do ABC analysis


Determine the annual usage in units for each item in

past one year. Multiply the annual usage quantity with average unit price of each item to calculate the annual usage. Arrange the item by cumulative percentage and categorize the item in A,B,C category.

Number

Average Units Unit Cost Usage

Annual Usage

Rank

1 2 3 4 5 6 7 8 9

17 50 15 25 5 50 153 20 16

2.5 17 15 17 17 119 5 2.125 2.656

42.5 850 225 425 85 5950 765 42.5 42.5

8 2 5 4 6 1 3 7 9

Number

Annual Usage

Cumulative annual Usage

Annual Usage %

Category Assigned

6
2

5950
850

5950
6800

70
80

A
B

7
4 3 5 8 1 10

765
425 225 85 42.5 42.5 42.5

7565
7990 8245 8330 8372.5 8415 8457.5

89
94 97 98 98.5 99 99.5

B
C C C C C C

THANK YOU

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy