what is ABC analysis please describe briefly.
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Answer / prabhu
ABC have many terms like Always Best Control etc. Lets take
an example of television, Picture tube or CRT is the major
part, contributing up to 70% of total cost but in quantity
it is only one set or piece. So it comes in A class and in
B class other products like monitor, speaker parts, outer
frame etc, contributing up to 20% of total cost and in
qunatity wise-around 20% of total parts. In C class, other
minor parts like screws, wires, circuit boards etc,
contributing the remaining 10% of cost and in quantity wise
70% of parts. Ok.. How it is used in inventory management?
The holding and carrying cost for the A class products are
very high and also if the demand decreases, it is difficult
to return these product. So we have to follow the practice
of less inventory or JUST IN TIME ordering. Thus B products-
Moderate inventory level and C products-More inventory
minimizes also the transportation and ordering cost.
Is This Answer Correct ? | 148 Yes | 30 No |
Answer / vivek
ABC analysis is an inventory management technique in which
the items are classified and clubbed according to their
value. The items comprising the top 5-10% of the total
value of inventory are termed as "Class A", the next 10-15%
are classified as "Class B" and the remaining as "Class C".
This management effort needed to maintain should decrease
from Class A to Class C.
Is This Answer Correct ? | 163 Yes | 63 No |
Answer / mrithulla
ABC analysis is a business term used to define an inventory
categorization technique often used in materials
management. ABC analysis provides a mechanism for
identifying items which will have a significant impact on
overall inventory cost whilst also providing a mechanism
for identifying different categories of stock that will
require different management and controls. When carrying
out an ABC analysis, inventory items are valued (item cost
multiplied by quantity issued/consumed in period) with the
results then ranked. The results are then grouped typically
into three bands. These bands are called ABC codes.
ABC codes
 "A class" inventory will typically contain items
that account for 80% of total value, or 20% of total items.
 "B class" inventory will have around 15% of total
value, or 30% of total items.
 "C class" inventory will account for the remaining
5%, or 50% of total items.
ABC Analysis is similar to Pareto in that the "A class"
group will typically account for a large proportion of the
overall value but a small percentage of the overall volume
of inventory
ABC Analysis considers Antecedents, Behavior and
Consequences of individual actions. It can be used in two
circumstances:
 When doing general job analysis
 When investigating actual behaviors (for example
when someone is under-performing or has transgressed
company rules).
Is This Answer Correct ? | 57 Yes | 8 No |
Answer / shivam srivastava
In accounting, ABC stands for activity-based costing. In
inventory or stock management, it's a method of stock
control. It's basic assumption is that not all stock is
equally valuable, therefore doesn't need the same kind of
attention.
So you categorise all your stock according to its cost and
quantity - and create a graph with cost shown on Y axis and
quantity shown on X. From left to right, you place your
stock from highest value to lowest. Typically, you see that
a small portion of stock is the most valuable, and therefore
needs maximum attention and resources - that's called 'A'.
The next most valuable section of stock is B, the next is C
and so on.
Is This Answer Correct ? | 43 Yes | 8 No |
Answer / amrita
A.B.C. Analysis is one of the techniques of inventory
control. It is called as “Always Better Control.” In this
technique the material is divided in to three categories or
the three groups. In A.B.C. Analysis inventory is
controlled according to the value of material. Control on
material according to their categories namely A.B.C. That
material which has a low quantity percentage but have very
high in value is come under the ‘A’ category. That material
which has a medium both in quantity percentage & in value
is come under the ‘B’ category. That material which has a
high quantity percentage but have very low in value is come
under the ‘C’ category
Is This Answer Correct ? | 43 Yes | 11 No |
Answer / subhash surolia
ABC analysis is the method to maitain optimum inventory
first of all we have devide the inventory in three catagory
first A then B and C
In First catagory we have selected 10% item which item which
covering to 70% of total value of inventory
In second catagory we have selected 20% item which item
coverign to 20% of total value of Inventory
and third catagory we have selected 70% item which item
covering to 10% of toal value of inventory
Then we will analysis the inventory accordingly
Is This Answer Correct ? | 21 Yes | 1 No |
Answer / hemant
ABC analysis is the tecnic of inventory first of all we
have devide the inventory in three catagory first A then B
and C
In First catagory we have selected 10% item which item which
efected to 70% vavlu (Inventory)
In second catagory we have selected 35% item which item
effected to 20% value (Inventory)
and third catagory we have selected 55% item which item
effect 10% value (inventory)
Then we will analysis the inventory accordingly
Is This Answer Correct ? | 19 Yes | 4 No |
ABC analysis, Pareto’s law or “80/20 rule” are
all-synonymous of the same tool which
basically states that 20% of a given population represents
80% of a specific characteristic.
In purchasing, the basic ABC analysis is used to identify
which segments represent most of
the spend in a given category or portfolio. Most of the
time, few segments in a portfolio
constitute the largest part of the total spend.
Usually,
- The A segments represent approximately 80% of the total
spend within a category
- The B segments represent the following 15% of the total
spend within a category
- The C segments are the remaining (most of the time several
segments) which
represents the final 5% of the total spend
The ABC approach can also be used in other analyses such as:
- Spend per supplier in a portfolio: few suppliers will
represent most of the spend
- Number of orders per supplier: few suppliers will have
most of the orders in a portfolio
- Number of items bought per supplier: few suppliers will
deliver most of the articles in
a portfolio
Is This Answer Correct ? | 11 Yes | 2 No |
Answer / nasir
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.
ABC analysis provides a mechanism for identifying items
which will have a significant impact on overall inventory
cost [1] whilst also providing a mechanism for identifying
different categories of stock that will require different
management and controls[2]
When carrying out an ABC analysis, inventory items are
valued (item cost multiplied by quantity issued/consumed in
period) with the results then ranked. The results are then
grouped typically into three bands[3]. These bands are
called ABC codes.
Is This Answer Correct ? | 8 Yes | 0 No |
Answer / sarada prasanna patra
ABC ANALYSIS IS BASED ON PARETO PRINCIPLE WHICH STATES
'TRIVIAL MANY, VITAL FEW'.
IF WE CONCENTRATE ON FEW ITEMS BUT OF VITAL VALUE, THEN MORE
PROBLEMS WILL BE SOLVED AT LESS TIME.
IN INVENTORY,A CLASS ITEMS CONSTITUTE OF 15%OF TOTAL
QUANTITY BUT OF VALUE OF 85% OF TOTAL VALUE.
SIMILARLY B FOR 5% QTY AND 20% VALUE.
C FOR 80 % QTY AND 5% VALUE.
THE % VARIES FROM AUTHOR TO AUTHOR AND COMPANY TO COMPANY.
BUT MAIN INTENSION IS TO LIQUADATE MORE INVENTORY VALUE AT
LESS TIME.
HERE VALUE IS CALCULATED AT TOTAL VALUE OF ITEMS, NOT
INDIVIDUAL ITEM VALUE.
IN CERTAIN COMPANY, A CLASS ITEM MEANS VALUE MORE THAN 1
LAKH, B VALUE IS 10000 TO 01 LAKH AND C FOR LESS THAN 10
THOUSAND. THIS IS CASE OF INDIVIDUAL VALUE.
Is This Answer Correct ? | 14 Yes | 7 No |
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