Interested to Buy Any Domain ? << Click Here >> for more details...
what is ABC analysis please describe briefly.
- 14 Answers
- 60562 Views
- OGDCL, State Bank of Travancore, I also Faced
- E-Mail Answers
Answer Posted / randy
ABC class coding for parts works for every aspect of a
Manufacturer. Primarily used for Purchasing Department to
determine quantity ordered and shipment dates.
The actual percentage varies from person to person and from
company to company. But as a basis rule:
Class "A" parts = 10% of the items - 70% value
Class "B" parts = 20% of the items - 20% value
Class "C" parts = 70% of the items - 10% value
In other words, in a Bill of Materials of a item
produced/assembled:
Class "A" = the top 10% of the items listed, represent 70%
of the total value of the item built.
Class "B" = the next 20% of the items listed, represent 20%
of the total value of the item built.
Class "C" = the next 70% of the items listed or remaining,
represent 10% of the total value of the item built.
This is just a guideline and can vary depending on what you
are manufacturing or assembling. Where I work, I have fine
tuned it to Class "A" = 20% of items represent 76% of cost,
Class "B" = 30% of items represent 17% of cost , Class "C" =
50% of items represent 7% of cost. But as a general rule to
start, "A" = 10%-70%, "B" = 20%-20%, "C" = 70%-10%.
Next is how much should I order and at what ship dates.
Since 70% of the cost is in the Class "A" items, this is
where you can control the inventory costs the most. I
generally use a 1-2 week ship date with a 2 week inventory
stock.
Class "B" items is generally a 4-8 week ship date with a 4
week inventory stock.
Class "C" items is generally 8 to 16 week ship date and a 8
week inventory stock.
This is also a good way to determine where you should spend
you time. 70% of your time is dealing with class "A" items,
20% of your time with Class "B" items, and 10% of your time
on Class "A: items.
By using these percentages, you can generally determine how
much dollars you should have in inventory at any one given
moment. If you don't have this formula in place now, a
slight increase in inventory levels and dollars might occur.
But within a few months, you will see the inventory levels
drop, your total inventory dollars be reduced, fewer
purchase orders being placed, and fewer problems with parts
not available for production.
If you find yourself always having problems when it comes to
the Purchasing Department, this is generally why. Not having
a ABC Class coding for all parts.
| Is This Answer Correct ? | 1 Yes | 1 No |
Post New Answer View All Answers
What is slow moving items?
Describe the frameworks for resolving ethical dilemmas?
distinguish between recruitment nad selection
The lean supply chain process at toyota Motor Corporation follows the practice of having only two to four supplier partner per component .what is the effect of this on Toyota Motor Corporation ?
What adjustments will you have to make in transitioning from the private sector to the public sector?
what is quterly accounts ?
What does oem mean & who is an oem?
State the basic elements of an export sales contract.
How many Type of TDS in UP and how much % ..Full details. Thanks & Regards
Differentiate between trips and trims. State the items prohibited in trims.
Tell us about the most difficult negotiation that you've participated in. What was your role? How did you influence the success or failure of the negotiations?
Local 5 % vat are applicable at stock transfer note Example my factory are placed on pithampur indore and our stockiest placed at dewas naka indore
How do you create movement types? What are the steps involved? When will you recommend a new movement type?
Explain the relationship between the balance of payments and the exchange rates of a country, giving suitable illustrations in support of your answer?
Explain the modern theory of international trade. How is it an improvement over the classical theory?
