Inventory ABC Analysis

Inventory ABC Analysis

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Activities ... Inventory ... ABC Analysis

About ABC Analysis

ABC Analysis is a widely accepted mathematical system of analyzing your inventory and classifying it into three categories: the critical items (A items), the important items (B Items) and the less important items (C items). You can then have ManageMore automatically select items to count based upon this classification and the last date which the item was counted. Larger companies will benefit from this feature as the computer assigns the ABC classification automatically, eliminating manual calculations. This analysis works with the inventory count process to allow you to count the critical items most often and the less important items less often.

In this Topic
   Quick Help - ABC Analysis
   Field by Field Help - ABC Analysis Wizard
   Q & A - ABC Analysis

Related Topics
   9.1   Supertrack Inventory
   10.7   Physical Inventory Counts

Quick Help - ABC Analysis

1)	Select the ABC Analysis menu option.

2)	Follow the wizard steps to classify inventory items.

Field by Field Help - ABC Analysis Wizard

Analysis Options

Four choices are available to classify the items in supertrack inventory:

Sales Value

Bases classification on net sales amount for each item. Net sales are found by computing the quantity sold, subtracting the quantity returned, then multiplying the result by the unit cost.

Sales Quantity

Bases classification on net sales quantity for each item. Net sales are found by computing the quantity sold and subtracting the quantity returned.

On Hand Inventory Value

Bases classification on the total cost amount for each item. Total cost is found by multiplying the number of units currently on hand by the item's unit cost.

Unit Cost

Bases classification on the unit cost for each item.

System Options

Depending on the previous choice, this screen will contain one or more options:

Perform Analysis For Specific Location
When checked, performs the ABC analysis only for the location specified. Otherwise, all locations will be considered.

Set ABC Classifications to "null" for items that have zero quantities
When checked, will put a blank value in the classification field of the supertrack inventory item. This is used if zero-quantity items should have no classification so that they will not be selected during the generation of an inventory count when ABC criteria is used. If unchecked, the items will be assigned a "C" classification.

Treat negative quantities as zero for this analysis
When checked, will calculate the classification for this item using zero as a quantity should the actual quantity be less than zero. This option is recommended, to avoid negative items skewing the mathematical results.

Prior months considered during analysis
Select the number of months of sales data to use for the calculation.

Breakpoints

Based on the choice of calculation method, the program will calculate the proper statistic for each item. It will then sort all items in order of the calculation method, then calculate the cumulative percentage/amount for each item.

Breakpoints in the range of cumulative values are used to calculate the ABC classification. By default the breakpoints are set at 80%, 90%, and 100%. This means that items with a cumulative percent less than or equal to 80% will be classified as A items. Items with a cumulative percent between 80% and 90% will be classified as B items. The rest will be classified as C items (or left blank, depending upon the system options).

The default breakpoints may be adjusted on this step.

Use percentages for breakpoints
When chosen, the program will evaluate cumulative percent to determine classifications.

Use values for breakpoints
When chosen, the program will evaluate cumulative value to determine classifications.

A Breakpoint / B Breakpoint / C Breakpoint
Set the percentage or value for each breakpoint. If the cumulative percent/value for an item is less than or equal to the breakpoint, it will be assigned that classification.

Preview
Click this button to preview the classifications computed with the breakpoints provided.

Analysis Completed

Preview
Click this button for a final preview of the classifications.

Finish
Click this button to save the classifications and return to the previous window.

Cancel
Click this button to discard the entered information and return to the previous window.

Q & A - ABC Analysis

Q01.	Can ABC classifications be edited after they are posted?

A01.	Yes. Edit the desired item(s) in supertrack inventory. You may edit the classification here.

Q02.	A user made a mistake during the ABC Analysis, now all of the items are classified incorrectly. How can this be fixed?

A02.	Simply run the ABC Analysis again.

Q03.	I don't see my question here. Where else can I get information?

A03.	Visit our website's Technical Support section.



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