ABC ANALYSIS

Definition:- 


There are systematically procedure control over the different type of material type,grade and varieties of inventory on the basis of the investment involved. there items are classified of different material Value and Annual consumption of material commodities.

(i) 'A' Category:-


It has 10 % of the total items handled by the store but require Large investment Value 70% of Inventory Value. These Stock of Material are controlled by fixing certain level, Minimum level and Re-order level. 


(ii) 'B' Category:-


It has 20 % of the total items handled by the store but require Large investment Value 20% of Inventory Value. The order of items to this category has be placed after reviewing perodically.


(iii) 'C' Category:-


It has 70 % of the total items handled by the store but require Large investment Value 10% of Inventory Value. There has no need for review Periodically and Orders for items in this Group has placed either after six month or once in year for review.


Figure-(1) :- Examples of Calculating of ABC Class of items separately with the Rules below the table:-