Conducting An Abc Analysis 3no4o
This document was ed by and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this report form. Report 3i3n4
Overview 26281t
& View Conducting An Abc Analysis as PDF for free.
More details 6y5l6z
- Words: 936
- Pages: 8
Conducting An ABC Analysis Mark K. Williams, CFPIM, CS Williams Supply Chain Group, Inc. www.w-scg.com [email protected] One of the first things a company should do in order to determine its inventory and sales profile is to conduct an ABC analysis. There are 8 steps to conduct an ABC Analysis, as demonstrated below. Step 1 - Determine the Annual Usage (or sales) for each item. I stress the word ANNUAL, if you take a one week or one month snapshot of usage (or sales), you could pick a month where an unusual demand from one customer could render your entire analysis worthless.
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 2 - Determine the Unit Cost (not selling price) for each item.
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 3 - Multiply the annual usage by the Unit Cost to determine the Annual Dollar Usage
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 4 - Sort the items based on their Annual Dollar Usage from highest to lowest.
Item #
Annual Usage
1
X-90
1,400
$25.00
$35,000
2
X-40
900
$32.00
$28,800
3
X-30
90
$50.00
$4,500
4
X-60
2,200
$2.00
$4,400
5
X-50
300
$10.00
$3,000
6
X-80
40
$35.00
$1,400
7
X-20
3,000
$0.40
$1,200
8
X-100
400
$2.00
$800
9
X-70
500
$1.30
$650
10
X-10
200
$1.20
$240
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 5 - Determine the percentage of sales (usage) that each item represents
Item #
Annual Usage
1
X-90
1,400
$25.00
$35,000
44%
2
X-40
900
$32.00
$28,800
36%
3
X-30
90
$50.00
$4,500
6%
4
X-60
2,200
$2.00
$4,400
6%
5
X-50
300
$10.00
$3,000
4%
6
X-80
40
$35.00
$1,400
2%
7
X-20
3,000
$0.40
$1,200
2%
8
X-100
400
$2.00
$800
1%
9
X-70
500
$1.30
$650
1%
10
X-10
200
$1.20
$240
0%
9,030
Unit Cost
Annual Dollar Usage
Part Number
% of Sales
Cumulative %
% of Items
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 6 - Determine the cumulative percentage of sales
% of Sales
Cumulative %
$35,000
44%
44%
$32.00
$28,800
36%
80%
90
$50.00
$4,500
6%
85%
X-60
2,200
$2.00
$4,400
6%
91%
5
X-50
300
$10.00
$3,000
4%
95%
6
X-80
40
$35.00
$1,400
2%
96%
7
X-20
3,000
$0.40
$1,200
2%
98%
8
X-100
400
$2.00
$800
1%
99%
9
X-70
500
$1.30
$650
1%
100%
10
X-10
200
$1.20
$240
0%
100%
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
% of Items
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 7 - Determine the cumulative percentage of items
% of Sales
Cumulative %
% of Items
$35,000
44%
44%
10%
$32.00
$28,800
36%
80%
20%
90
$50.00
$4,500
6%
85%
30%
X-60
2,200
$2.00
$4,400
6%
91%
40%
5
X-50
300
$10.00
$3,000
4%
95%
50%
6
X-80
40
$35.00
$1,400
2%
96%
60%
7
X-20
3,000
$0.40
$1,200
2%
98%
70%
8
X-100
400
$2.00
$800
1%
99%
80%
9
X-70
500
$1.30
$650
1%
100%
90%
10
X-10
200
$1.20
$240
0%
100% 100%
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 8 Assign ABC Codes: A = approximately 20% of Items = approximately 80% of sales (usage) B - approximately 30% of Items = approximately 15% of sales (usage) C - approximately 50% of Items = approximately 5% of sales (usage) % of Sales
Cumulative %
% of Items
$35,000
44%
44%
10%
A
$32.00
$28,800
36%
80%
20%
A
90
$50.00
$4,500
6%
85%
30%
B
X-60
2,200
$2.00
$4,400
6%
91%
40%
B
5
X-50
300
$10.00
$3,000
4%
95%
50%
B
6
X-80
40
$35.00
$1,400
2%
96%
60%
C
7
X-20
3,000
$0.40
$1,200
2%
98%
70%
C
8
X-100
400
$2.00
$800
1%
99%
80%
C
9
X-70
500
$1.30
$650
1%
100%
90%
C
10
X-10
200
$1.20
$240
0%
100% 100%
C
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
ABC Code
$79,990
After conducting an ABC Analysis, read 10 Keys to Inventory Reduction by Mark K. Williams, CFPIM, CS for ideas on how to use the information.
©Williams Supply Chain Group, Inc. www.w-scg.com
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 2 - Determine the Unit Cost (not selling price) for each item.
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 3 - Multiply the annual usage by the Unit Cost to determine the Annual Dollar Usage
Item #
Annual Usage
1
X-10
200
$1.20
$240
2
X-20
3,000
$0.40
$1,200
3
X-30
90
$50.00
$4,500
4
X-40
900
$32.00
$28,800
5
X-50
300
$10.00
$3,000
6
X-60
2,200
$2.00
$4,400
7
X-70
500
$1.30
$650
8
X-80
40
$35.00
$1,400
9
X-90
1,400
$25.00
$35,000
X-100
400
$2.00
$800
10
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 4 - Sort the items based on their Annual Dollar Usage from highest to lowest.
Item #
Annual Usage
1
X-90
1,400
$25.00
$35,000
2
X-40
900
$32.00
$28,800
3
X-30
90
$50.00
$4,500
4
X-60
2,200
$2.00
$4,400
5
X-50
300
$10.00
$3,000
6
X-80
40
$35.00
$1,400
7
X-20
3,000
$0.40
$1,200
8
X-100
400
$2.00
$800
9
X-70
500
$1.30
$650
10
X-10
200
$1.20
$240
9,030
Unit Cost
Annual Dollar Usage
Part Number
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 5 - Determine the percentage of sales (usage) that each item represents
Item #
Annual Usage
1
X-90
1,400
$25.00
$35,000
44%
2
X-40
900
$32.00
$28,800
36%
3
X-30
90
$50.00
$4,500
6%
4
X-60
2,200
$2.00
$4,400
6%
5
X-50
300
$10.00
$3,000
4%
6
X-80
40
$35.00
$1,400
2%
7
X-20
3,000
$0.40
$1,200
2%
8
X-100
400
$2.00
$800
1%
9
X-70
500
$1.30
$650
1%
10
X-10
200
$1.20
$240
0%
9,030
Unit Cost
Annual Dollar Usage
Part Number
% of Sales
Cumulative %
% of Items
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 6 - Determine the cumulative percentage of sales
% of Sales
Cumulative %
$35,000
44%
44%
$32.00
$28,800
36%
80%
90
$50.00
$4,500
6%
85%
X-60
2,200
$2.00
$4,400
6%
91%
5
X-50
300
$10.00
$3,000
4%
95%
6
X-80
40
$35.00
$1,400
2%
96%
7
X-20
3,000
$0.40
$1,200
2%
98%
8
X-100
400
$2.00
$800
1%
99%
9
X-70
500
$1.30
$650
1%
100%
10
X-10
200
$1.20
$240
0%
100%
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
% of Items
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 7 - Determine the cumulative percentage of items
% of Sales
Cumulative %
% of Items
$35,000
44%
44%
10%
$32.00
$28,800
36%
80%
20%
90
$50.00
$4,500
6%
85%
30%
X-60
2,200
$2.00
$4,400
6%
91%
40%
5
X-50
300
$10.00
$3,000
4%
95%
50%
6
X-80
40
$35.00
$1,400
2%
96%
60%
7
X-20
3,000
$0.40
$1,200
2%
98%
70%
8
X-100
400
$2.00
$800
1%
99%
80%
9
X-70
500
$1.30
$650
1%
100%
90%
10
X-10
200
$1.20
$240
0%
100% 100%
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
ABC Code
$79,990
©Williams Supply Chain Group, Inc. www.w-scg.com
Step 8 Assign ABC Codes: A = approximately 20% of Items = approximately 80% of sales (usage) B - approximately 30% of Items = approximately 15% of sales (usage) C - approximately 50% of Items = approximately 5% of sales (usage) % of Sales
Cumulative %
% of Items
$35,000
44%
44%
10%
A
$32.00
$28,800
36%
80%
20%
A
90
$50.00
$4,500
6%
85%
30%
B
X-60
2,200
$2.00
$4,400
6%
91%
40%
B
5
X-50
300
$10.00
$3,000
4%
95%
50%
B
6
X-80
40
$35.00
$1,400
2%
96%
60%
C
7
X-20
3,000
$0.40
$1,200
2%
98%
70%
C
8
X-100
400
$2.00
$800
1%
99%
80%
C
9
X-70
500
$1.30
$650
1%
100%
90%
C
10
X-10
200
$1.20
$240
0%
100% 100%
C
Item #
Part Number
Annual Usage
1
X-90
1,400
$25.00
2
X-40
900
3
X-30
4
9,030
Unit Cost
Annual Dollar Usage
ABC Code
$79,990
After conducting an ABC Analysis, read 10 Keys to Inventory Reduction by Mark K. Williams, CFPIM, CS for ideas on how to use the information.
©Williams Supply Chain Group, Inc. www.w-scg.com
Related Documents 3h463d
Conducting An Abc Analysis 3no4o
November 2019 40
Abc Analysis 2ze3u
December 2019 42
Abc Analysis 2ze3u
April 2021 0
Types Of Abc Analysis 243v2e
December 2021 0
Abc Analysis - Wiki 3q754
December 2019 46
Abc Analysis Ppt 496g4
November 2019 103More Documents from "Mark K. Williams" 602o2n
Conducting An Abc Analysis 3no4o
November 2019 40
December 2021 0
Damage Certificate 51e6d
October 2019 61
Reich - Aftershock (2010) - Synopsis 3o5e22
November 2019 34
Cullen Murphy - Are We Rome (2007) - Synopsis 223z1e
November 2019 34