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ABC Analysis

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This function allows for both ABC analysis and ABC reclassification of inventory parts for a selected division.  It provides for various options to perform the analysis and, once performed enables you to specify the usage value breakpoints between the classes and reclassify the parts accordingly by the resulting update of the part master records.  The period, over which the analysis is performed, can be either a past period of usage history or a future period of stated demand, as reflected in the "requirements" file, or a combination of both.

 

ABC Analysis is performed to calculate the "usage value" of inventory parts and lists them in decreasing order of value to provide visibility of the value spent (or to be spent) per part and the percentage of such value in relation to the total value spent on inventory.  The concept is based on the Pareto principle where the effort saved through relaxed controls on low usage value items can be directed to improve control of high usage value items.

 

The ABC reclassification supports stated goals for inventory reduction and turnover by the application of the "period covered interval" order policy and limiting the "days supply" according to the ABC class of a part.  Cycle count frequency of parts can also be based on the ABC reclassification.

 

INQUIRE

The user must have a security profile linked to the function ABC Analysis with an access allowed of Inquire.