Report Title:

ABC Inventory Analysis

Number:

BP843

Description:

This report is designed to group Inventory Items into three categories based on Year to Date Sales and Issues.  ABC analysis is based on the concept that a small percentage of Items will provide the most Sales Revenue (A Items).  The next group will contain more Items, but comparatively less Sales Revenue (B Items).  The final group will be a large number of Items that have few Sales (C Items).  From a management perspective, it is most efficient to expend time, energy and resources on the A Items, and little to no effort on the C Items.

Requirements:

Inventory

Problem:

I want to make sure that my quantity on hand is always accurate, and be able to identify and research problems quickly, but we don't have the time and resources needed to do a physical count every month?

Solution:

Use the ABC Analysis Report to identify the items that generate the most sales.  The average company generates the most sales with only 20% of their Inventory Items (A Items).  Find what your company's "A Items" are and dedicate the resources you have to managing these important items.

Problem:

I have one item that makes up 30% of my Inventory Sales and Issues.  How can I use ABC Analysis to manage my inventory?

Solution:

Most companies can use the default definition of:  "A Items" - top 20% usage, "B Items" - 21% to 50%, and "C Items" - 51% to 80%.  However, these defaults can be set to the percentages that make the most sense for your company.

Report Examples:

Report by ABC with the Values of 20% for A, 50% for B, and 80% for C

Report by ABC with the Values of 30% for A, 60% for B, and 90% for C