ch5_scm_2

2 abc analysis to highlight most important items in

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Unformatted text preview: tral information process Centralized system Flow of production 31 3.2 ABC Analysis • To highlight most important items in systems with multiple items. • Selective inventory control. • ABC: – ‘A’ items: very important items for an organization – ‘B’ items: important but less important than ‘A’ items – ‘C’ items: marginally important • Example breakdown: – ‘A’ items: 20% of the items accounts for 70% of the annual consumption value of the items. – ‘B’ items: 30% of the items accounts for 25% of the annual consumption value of the items. – ‘C’ items: 50% of the items accounts for 5% of the annual consumption value of the items 32 3.2 ABC Analysis • Steps: 1. Sort items by decreasing $ sales 2. Plot cumulative % of $ sales vs. cumulative % of items 33 3.2 ABC Analysis SKU (Stock-keeping units) (Source; Wikipedia) 34 3.2 ABC Analysis • ABC analysis enables you to focus attention on the small percent...
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