Abc Analysis Ppt 496g4

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The ABC analysis can be also be useful in several steps of the Sourcing Value Chain: ! Demand Identification, to gather the annual spend of a site ! Demand Aggregation, to gather the annual spend of several sites ! Opportunity Assessment, to identify leveraging opportunities

The ABC tool is used to identify the ͞vital few͟ from the ͞trivial many͟, according to a defined set of criteria

Different decisions may be taken from the result of the ABC analysis

* steps used to perform an ABC analysis:

1st step ʹ Identify the objective and the analysis criterion

2nd step ʹCollect data about the analyzed population

3rd step ʹ Sort out the list by decreasing impact

4th step ʹ Calculate the accumulated impact and the percentage

5th step ʹ Identify the classes

*th step ʹ Analyze the classes and take appropriate decisions

/0!/! An ABC analysis requires directionally correct data. It relies on the availability of systems allowing measurement of the criteria chosen for the analysis.

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'ost of the time only past annual spend is available to perform an ABC analysis.

CONCLUSION Thus, ABC Analysis is a vital method of Inventory Control.