ABC analysis

• ABC are classes of inventory item.

A is the most important and the most expensive- under a ABC regime for minimum stock value A should be managed by JIT since its value makes this close management cost-effective

B are intermediate and medium expensive- under a ABC regime for minimum stock value B should be managed by Kanban pulling- the micromanagement by JIT is not cost effective for this project but it should still be tracked methodically.

C are low value items- under an ABC regime for minimum stock value C should be managed by 2 bin- whereby two huge bins of (eg screws) item are kept and one is used at a time- when one runs out another is ordered and the next bin is used. The low value does not justify management- and any downtime because of running out would cost much more than the product itself.

In an analysis it is decided which products are A,B or C and exactly how they will be managed.


ABC anaylysis is a system in inventory management to minimise the cost of inventorries incorporated n which r stored for long time ,these are classified into ABC groups whreas A stand for the most expensive inventories which are purchased on customers demands so that it can b processed n thn given to them on priority basis , these items are carefully selected
B is classified for those goods which are less expensive thn A items n which can b stored for some time bfoe it is processed

c goes for those items which r cheap n also can b abuntenly used . these r items where its loss wont cost much to the company
hope i answered ur question well.....
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The inventory materials are classified into 3 types
A grade materials - these materials are usally of high cost and is one of the main raw material in the production of the product and these materials should be protected carefully
B grade materials - these materials are the other parts which forms the part of a product
C grade materials - these materials low in quality and of low value but still form a part of the product
Ex - shoes here in shoes leather forms A grade materials , sole forms B grade materials and shoe lace forms C grade materials
this is ABC analysis in inventory mangement
In accounting, ABC stands for activity-based costing. In inventory or stock management, it's a method of stock control. It's basic assumption is that not all stock is equally valuable, therefore doesn't need the same kind of attention.

So you categorise all your stock according to its cost and quantity - and create a graph with cost shown on Y axis and quantity shown on X. From left to right, you place your stock from highest value to lowest. Typically, you see that a small portion of stock is the most valuable, and therefore needs maximum attention and resources - that's called 'A'. The next most valuable section of stock is B, the next is C and so on.

Basically it shows you which stocks need more attention and which need less. It helps in utilising resources for stock management more effectively.