Discuss the ABC classification inventory using a suitable diagram.
Discuss the ABC classification inventory using a suitable diagram.
Share
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
ABC classification is a method used in inventory management to categorize items based on their importance and value to the organization. It helps prioritize inventory management efforts by focusing attention on items that have the greatest impact on costs, profitability, and customer satisfaction. The ABC classification divides inventory items into three categories: A, B, and C, based on their contribution to overall inventory value or usage.
Key Concepts:
Category A: Category A items are high-value or high-usage items that represent a significant portion of the total inventory value or consumption. Although they may constitute a relatively small percentage of the total number of items, they contribute the most to inventory costs or sales revenue. Examples include top-selling products, high-value components, or critical supplies.
Category B: Category B items are moderate-value or moderate-usage items that have a moderate impact on inventory costs or consumption. They typically represent a moderate portion of the total inventory value or usage and require moderate attention in terms of inventory management. Examples include products with steady demand or components with moderate cost.
Category C: Category C items are low-value or low-usage items that have minimal impact on inventory costs or consumption. Although they may constitute a large percentage of the total number of items, they contribute relatively little to the total inventory value or usage. Examples include slow-moving items, low-cost components, or incidental supplies.
Diagram:
In the diagram: