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Wednesday, February 9, 2011

Technology in A B C Analysis

Buzz It

A B C analysis:
Analysis of a range of parts which have different levels of significance and it should be   controlled differently.

It is a form of Pareto analysis.

Activities, customer’s, documents, inventory items, sales territories, are grouped in to three categories as A B C to analyze. 
A category items are very important. Require close monitoring and tight control, includes expensive items with a small % of overall inventory volume.
A category items is about 70 to 80%.
A part’s  - the annual consumption value =    the amount of product consumed in a given period (often a year)  X by it’s price.  

B class  20% relates to B class items are important. B class items has lesser important than A class parts still require more control than consumables (consumables = Paints, thinners, rubber products, radiator coolant, gasket sealants Ana bond etc .so apply FIFO on these items.) and will require some management effort.

C class parts are marginally important.
C classes make up the remaining. It is about 10%. C class requires the least controls, and will typically make up the largest volume of the stock.

Thank you.

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