what is ABC analysis please describe briefly.
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Answer Posted / 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.
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