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A-B-C-D

ABC analysis is a specific classification of inventory items. Due to its universal nature, it is used in the classification of items, in evaluating customers and suppliers, and in prioritizing activities.

 
Brief Description :

Classification depends on the scope of material management and can look as follows:

A - important / high value / high turnover
B - medium-important / medium-value / bringing medium turnover
C - less important / of low value / yielding poor turnover
 

The following percentage results were set for the distribution of the total quantity:

 
 
 
 
Value
 
Quantity
Part A
60 – 85 %
10 %
Part B
10 – 25 %
20 – 30 %
Part C
5 – 15 %
60 – 70 %
 
 
 
Tasks and Objectives

ABC analysis aims to show the relationship between inputs and profit to demonstrate which department in the company should be given special attention or which department should be optimized. Other objectives:

- distinguish between important and unimportant things
- Paying attention to departments with high economic importance
- increase the efficiency of the company
 
 
Application

In materials management, ABC analysis can be used, for example, to allocate purchases, suppliers, employee capacity, quality standards, as well as prices and purchasing terms. When using a combination of ABC analysis with XYZ analysis (also with RSU analysis), the efficiency of both methods can be further increased (= ABC/XYZ analysis ).

RELATED TERMS
 
  • RSU analysis
  • MRO
  • Pareto

Intralog products:

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kzielinska