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ABC Analysis

ABC Analysis. A complete understanding. The ABC analysis is a business term used to define an inventory categorization technique often used in materials management. It is also known as Selective Inventory Control. . Introduction.

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ABC Analysis

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  1. ABC Analysis A complete understanding

  2. The ABC analysisis a business term used to define an inventory categorization technique often used in materials management. • It is also known as Selective Inventory Control. Introduction

  3. A ITEMS: very tightly controlled and accurate records. • B ITEMS: less tightly controlled and good records. • C ITEMS: simplest controls possible and minimal records. Policies based on ABC Analysis

  4. The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost, while also providing a mechanism for identifying different categories of stock that will require different management and controls. General workings of ABC analysis

  5. The ABC analysis suggests that inventories of an organization are not of equal value. • Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance.

  6. Example: Distribution of ABC Analysis

  7. Example: Tabulated distribution of ABC analysis

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