SlideShare a Scribd company logo

Abc analysis

A
akshay_005
1 of 14
Download to read offline
Abc analysis
The term INVENTORY is defined as
“the systematic control and regulation of
purchase, storage and usage of materials
in such a way so as to maintain an even
flow of production and at the same time
avoiding excessive investment in
inventories.”
(ABC = Always Better Control)
‡ This is based on cost criteria.
‡
It helps to exercise selective control when
confronted with large number of items it
rationalizes the number of orders, number of
items & reduce the inventory.
‡
About 10 % of materials consume 70 % of
resources
‡
About 20 % of materials consume 20 % of
Small in number, but consume large
amount of resources
Must have:

Tight control

Rigid estimate of requirements

Strict & closer watch

Low safety stocks

Managed by top management
‡
Intermediate
‡
Must have:

Moderate control

Purchase based on rigid requirements

Reasonably strict watch & control

Moderate safety stocks

Managed by middle level management
Larger in number, but consume lesser
amount of resources
‡
Must have:

Ordinary control measures

Purchase based on usage estimates

High safety stocks
‡
ABC analysis does not stress on items those are less
costly but may be vital

Recommended

Abc Analysis
Abc AnalysisAbc Analysis
Abc AnalysisAshim Roy
 
Analysis of invetory control techniques
Analysis of invetory control techniquesAnalysis of invetory control techniques
Analysis of invetory control techniquesSameer Chaudhari
 
Unit-VII material management -VED analysis slide share
Unit-VII material  management -VED  analysis slide shareUnit-VII material  management -VED  analysis slide share
Unit-VII material management -VED analysis slide shareanjalatchi
 
Abc, ved, hml analysis in material management
Abc, ved, hml analysis in material managementAbc, ved, hml analysis in material management
Abc, ved, hml analysis in material managementManjubeth
 

More Related Content

What's hot

What's hot (20)

Inventory management
Inventory managementInventory management
Inventory management
 
Inventory
InventoryInventory
Inventory
 
Inventory management
Inventory managementInventory management
Inventory management
 
Stores Organisation
Stores OrganisationStores Organisation
Stores Organisation
 
To study Inventory control with respect to ABC, VED and FSN in Hospital
To study Inventory control with respect to ABC, VED and FSN in HospitalTo study Inventory control with respect to ABC, VED and FSN in Hospital
To study Inventory control with respect to ABC, VED and FSN in Hospital
 
Inventory control techniques
Inventory control techniquesInventory control techniques
Inventory control techniques
 
Inventory control
Inventory controlInventory control
Inventory control
 
Inventory control
Inventory controlInventory control
Inventory control
 
ABC Analysis-Inventory Management
ABC Analysis-Inventory ManagementABC Analysis-Inventory Management
ABC Analysis-Inventory Management
 
Inventory Management
Inventory Management Inventory Management
Inventory Management
 
Inventory management
Inventory managementInventory management
Inventory management
 
Inventory control
Inventory controlInventory control
Inventory control
 
Inventory control
Inventory controlInventory control
Inventory control
 
Materials management
Materials managementMaterials management
Materials management
 
VED analysis
VED analysisVED analysis
VED analysis
 
Objective of inventory management
Objective of  inventory managementObjective of  inventory management
Objective of inventory management
 
Selective inventory control
Selective inventory controlSelective inventory control
Selective inventory control
 
Inventory control
Inventory controlInventory control
Inventory control
 
Inventory control techniques
Inventory control techniquesInventory control techniques
Inventory control techniques
 
Abc & Ved
Abc & VedAbc & Ved
Abc & Ved
 

Viewers also liked

Inventory Control ABC Analysis
Inventory Control ABC AnalysisInventory Control ABC Analysis
Inventory Control ABC Analysisyashpal01
 
New Purchasing Procedures
New Purchasing Procedures New Purchasing Procedures
New Purchasing Procedures jbayer430
 
Supply Chain Management, Procurement, Sourcing, Acquire, and Logistics
Supply Chain Management, Procurement, Sourcing, Acquire, and LogisticsSupply Chain Management, Procurement, Sourcing, Acquire, and Logistics
Supply Chain Management, Procurement, Sourcing, Acquire, and LogisticsRishabh Agarwal
 
Purchasing policy and procedures
Purchasing policy and proceduresPurchasing policy and procedures
Purchasing policy and proceduresKris Marie Laserna
 
inventory control & ABC analysis ppt
inventory control & ABC analysis pptinventory control & ABC analysis ppt
inventory control & ABC analysis ppthyderali123
 
Project presentation on wireless lpg leakage detector
Project presentation on wireless lpg leakage detectorProject presentation on wireless lpg leakage detector
Project presentation on wireless lpg leakage detectorPETER ASIGRI
 

Viewers also liked (13)

Inventory Control ABC Analysis
Inventory Control ABC AnalysisInventory Control ABC Analysis
Inventory Control ABC Analysis
 
investment
investmentinvestment
investment
 
Selected topics in stock market
Selected topics in stock marketSelected topics in stock market
Selected topics in stock market
 
New Purchasing Procedures
New Purchasing Procedures New Purchasing Procedures
New Purchasing Procedures
 
Branch connections
Branch connectionsBranch connections
Branch connections
 
Supply Chain Management, Procurement, Sourcing, Acquire, and Logistics
Supply Chain Management, Procurement, Sourcing, Acquire, and LogisticsSupply Chain Management, Procurement, Sourcing, Acquire, and Logistics
Supply Chain Management, Procurement, Sourcing, Acquire, and Logistics
 
Purchasing policy and procedures
Purchasing policy and proceduresPurchasing policy and procedures
Purchasing policy and procedures
 
Inventory control
Inventory controlInventory control
Inventory control
 
An introduction to investment
An introduction to investmentAn introduction to investment
An introduction to investment
 
inventory control & ABC analysis ppt
inventory control & ABC analysis pptinventory control & ABC analysis ppt
inventory control & ABC analysis ppt
 
Plant layout
Plant layoutPlant layout
Plant layout
 
Inventory control in nursing
Inventory control  in nursingInventory control  in nursing
Inventory control in nursing
 
Project presentation on wireless lpg leakage detector
Project presentation on wireless lpg leakage detectorProject presentation on wireless lpg leakage detector
Project presentation on wireless lpg leakage detector
 

Similar to Abc analysis

Wastage management and pilferage control
Wastage management and pilferage controlWastage management and pilferage control
Wastage management and pilferage controlNishant Modak
 
Inventory controltechniques ppt by ann
Inventory controltechniques ppt by annInventory controltechniques ppt by ann
Inventory controltechniques ppt by annAnjali Rarichan
 
Material Management and ABC analysis
Material Management and ABC analysisMaterial Management and ABC analysis
Material Management and ABC analysisDr. Sonal Mandhotra
 
ProductManagement-InventroyManagementandControls.pptx
ProductManagement-InventroyManagementandControls.pptxProductManagement-InventroyManagementandControls.pptx
ProductManagement-InventroyManagementandControls.pptxPrachi Pandey
 
Product Management- Inventroy Management and Controls.pptx
Product Management- Inventroy Management and Controls.pptxProduct Management- Inventroy Management and Controls.pptx
Product Management- Inventroy Management and Controls.pptxRAHUL PAL
 
Product Management: Inventory Management and Controls.pdf
Product Management: Inventory Management and Controls.pdfProduct Management: Inventory Management and Controls.pdf
Product Management: Inventory Management and Controls.pdfPrachi Pandey
 
Inventory control Seminar Hospital Inventory
Inventory control Seminar Hospital InventoryInventory control Seminar Hospital Inventory
Inventory control Seminar Hospital Inventorypradeepmk8
 
Material mangement (1).pptx
Material mangement (1).pptxMaterial mangement (1).pptx
Material mangement (1).pptxneelasasi
 

Similar to Abc analysis (20)

Wastage management and pilferage control
Wastage management and pilferage controlWastage management and pilferage control
Wastage management and pilferage control
 
Material management
Material managementMaterial management
Material management
 
ABC Analysis
ABC AnalysisABC Analysis
ABC Analysis
 
Inventory controltechniques ppt by ann
Inventory controltechniques ppt by annInventory controltechniques ppt by ann
Inventory controltechniques ppt by ann
 
V. RAGINI
V. RAGINIV. RAGINI
V. RAGINI
 
Inventry control
Inventry controlInventry control
Inventry control
 
L1.ppt
L1.pptL1.ppt
L1.ppt
 
14ab1t0005 abc analysis
14ab1t0005   abc analysis14ab1t0005   abc analysis
14ab1t0005 abc analysis
 
kamma sri pandu mukharjee
kamma sri pandu mukharjeekamma sri pandu mukharjee
kamma sri pandu mukharjee
 
ALWAYS BETTER CONTROL
ALWAYS BETTER CONTROLALWAYS BETTER CONTROL
ALWAYS BETTER CONTROL
 
Material Management and ABC analysis
Material Management and ABC analysisMaterial Management and ABC analysis
Material Management and ABC analysis
 
Material management
Material managementMaterial management
Material management
 
ProductManagement-InventroyManagementandControls.pptx
ProductManagement-InventroyManagementandControls.pptxProductManagement-InventroyManagementandControls.pptx
ProductManagement-InventroyManagementandControls.pptx
 
Product Management- Inventroy Management and Controls.pptx
Product Management- Inventroy Management and Controls.pptxProduct Management- Inventroy Management and Controls.pptx
Product Management- Inventroy Management and Controls.pptx
 
Product Management: Inventory Management and Controls.pdf
Product Management: Inventory Management and Controls.pdfProduct Management: Inventory Management and Controls.pdf
Product Management: Inventory Management and Controls.pdf
 
Inventory control Seminar Hospital Inventory
Inventory control Seminar Hospital InventoryInventory control Seminar Hospital Inventory
Inventory control Seminar Hospital Inventory
 
Materialcontrol
Materialcontrol Materialcontrol
Materialcontrol
 
Operations
OperationsOperations
Operations
 
Material mangement (1).pptx
Material mangement (1).pptxMaterial mangement (1).pptx
Material mangement (1).pptx
 
Inventory control
Inventory controlInventory control
Inventory control
 

Recently uploaded

A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfA Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfOH TEIK BIN
 
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...SUMIT TIWARI
 
Capitol Doctoral Presentation -Feb 2024.pptx
Capitol Doctoral Presentation -Feb 2024.pptxCapitol Doctoral Presentation -Feb 2024.pptx
Capitol Doctoral Presentation -Feb 2024.pptxCapitolTechU
 
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...liera silvan
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptxMaryPotorti1
 
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdf
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdfDr.M.Florence Dayana-Cloud Computing-unit - 4.pdf
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdfDr.Florence Dayana
 
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...Rabiya Husain
 
Understanding the New PCHF Analysis Guidance
Understanding the New PCHF Analysis GuidanceUnderstanding the New PCHF Analysis Guidance
Understanding the New PCHF Analysis GuidanceSafetyChain Software
 
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...AKSHAYMAGAR17
 
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdfAynouraHamidova
 
spring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfspring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfKonstantina Koutsodimou
 
Organic Synthesis and Estimation of Functional Groups
Organic Synthesis and Estimation of Functional GroupsOrganic Synthesis and Estimation of Functional Groups
Organic Synthesis and Estimation of Functional GroupsDr.M.Geethavani
 
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS method.pptx
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS  method.pptxADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS  method.pptx
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS method.pptxAKSHAYMAGAR17
 
Mycology Update February 2024 Microbes with Morgan
Mycology Update February 2024 Microbes with MorganMycology Update February 2024 Microbes with Morgan
Mycology Update February 2024 Microbes with MorganMargie Morgan
 
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfDr.M.Geethavani
 
New Features in the Odoo 17 Sales Module
New Features in  the Odoo 17 Sales ModuleNew Features in  the Odoo 17 Sales Module
New Features in the Odoo 17 Sales ModuleCeline George
 
EDL 290F Week 2 - Good Company (2024).pdf
EDL 290F Week 2  - Good Company (2024).pdfEDL 290F Week 2  - Good Company (2024).pdf
EDL 290F Week 2 - Good Company (2024).pdfElizabeth Walsh
 
Permeation enhancer of Transdermal drug delivery system
Permeation enhancer of Transdermal drug delivery systemPermeation enhancer of Transdermal drug delivery system
Permeation enhancer of Transdermal drug delivery systemchetanpatil2572000
 

Recently uploaded (20)

A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdfA Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
A Free eBook ~ Mental Exercise ...Puzzles to Analyze.pdf
 
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...
Bilingual notes of Pharmacognosy chapter 4Glycosides, Volatile oils,Tannins,R...
 
Capitol Doctoral Presentation -Feb 2024.pptx
Capitol Doctoral Presentation -Feb 2024.pptxCapitol Doctoral Presentation -Feb 2024.pptx
Capitol Doctoral Presentation -Feb 2024.pptx
 
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...
EmpTech Lesson 7 - Online Creation Tools, Platforms, and Applications for ICT...
 
2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx2.22.24 Black Nationalism and the Nation of Islam.pptx
2.22.24 Black Nationalism and the Nation of Islam.pptx
 
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdf
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdfDr.M.Florence Dayana-Cloud Computing-unit - 4.pdf
Dr.M.Florence Dayana-Cloud Computing-unit - 4.pdf
 
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...
Barrow Motor Ability Test - TEST, MEASUREMENT AND EVALUATION IN PHYSICAL EDUC...
 
CLUBE PERLINGUAS .
CLUBE PERLINGUAS                        .CLUBE PERLINGUAS                        .
CLUBE PERLINGUAS .
 
Understanding the New PCHF Analysis Guidance
Understanding the New PCHF Analysis GuidanceUnderstanding the New PCHF Analysis Guidance
Understanding the New PCHF Analysis Guidance
 
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...
Ideotype concept and climate resilient crop varieties for future- Wheat, Rice...
 
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
11 CI SINIF SINAQLARI - 10-2023-Aynura-Hamidova.pdf
 
spring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdfspring_bee_bot_creations_erd primary.pdf
spring_bee_bot_creations_erd primary.pdf
 
Organic Synthesis and Estimation of Functional Groups
Organic Synthesis and Estimation of Functional GroupsOrganic Synthesis and Estimation of Functional Groups
Organic Synthesis and Estimation of Functional Groups
 
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS method.pptx
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS  method.pptxADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS  method.pptx
ADAPTABILITY, Types of Adaptability AND STABILITY ANALYSIS method.pptx
 
Mycology Update February 2024 Microbes with Morgan
Mycology Update February 2024 Microbes with MorganMycology Update February 2024 Microbes with Morgan
Mycology Update February 2024 Microbes with Morgan
 
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdfA LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
A LABORATORY MANUAL FOR ORGANIC CHEMISTRY.pdf
 
New Features in the Odoo 17 Sales Module
New Features in  the Odoo 17 Sales ModuleNew Features in  the Odoo 17 Sales Module
New Features in the Odoo 17 Sales Module
 
EDL 290F Week 2 - Good Company (2024).pdf
EDL 290F Week 2  - Good Company (2024).pdfEDL 290F Week 2  - Good Company (2024).pdf
EDL 290F Week 2 - Good Company (2024).pdf
 
ThinkTech 2024 Prelims- U25 BizTech Quiz by Pragya
ThinkTech 2024 Prelims- U25 BizTech Quiz by PragyaThinkTech 2024 Prelims- U25 BizTech Quiz by Pragya
ThinkTech 2024 Prelims- U25 BizTech Quiz by Pragya
 
Permeation enhancer of Transdermal drug delivery system
Permeation enhancer of Transdermal drug delivery systemPermeation enhancer of Transdermal drug delivery system
Permeation enhancer of Transdermal drug delivery system
 

Abc analysis

  • 2. The term INVENTORY is defined as “the systematic control and regulation of purchase, storage and usage of materials in such a way so as to maintain an even flow of production and at the same time avoiding excessive investment in inventories.”
  • 3. (ABC = Always Better Control) ‡ This is based on cost criteria. ‡ It helps to exercise selective control when confronted with large number of items it rationalizes the number of orders, number of items & reduce the inventory. ‡ About 10 % of materials consume 70 % of resources ‡ About 20 % of materials consume 20 % of
  • 4. Small in number, but consume large amount of resources Must have: Tight control Rigid estimate of requirements Strict & closer watch Low safety stocks Managed by top management
  • 5. ‡ Intermediate ‡ Must have: Moderate control Purchase based on rigid requirements Reasonably strict watch & control Moderate safety stocks Managed by middle level management
  • 6. Larger in number, but consume lesser amount of resources ‡ Must have: Ordinary control measures Purchase based on usage estimates High safety stocks ‡ ABC analysis does not stress on items those are less costly but may be vital
  • 8. 6- steps used to perform an ABC analysis ‡ 1st step Identify the objective and the analysis criterion. ‡ 2nd step Collect data about the analyzed population. ‡ 3rd step Sort out the list by decreasing impact. ‡ 4th step Calculate the accumulated impact and the percentage. ‡
  • 9. - In shoes leather forms A grade materials , sole forms B grade materials and shoe lace forms C grade -ABC Analysis in Medical Stores inventory materials, this is ABC analysis in Inventory Control Background: The basic principle of inventory control is management ABC based on cost criteria . Methods: Based on ABC matrix, economic analysis of drug expenditure of priced vocabulary of medical stores (PVMS) section 01 for the year 2003 of a 190 bedded service hospital was under taken. Result: Out of 493 drugs in PVMS section 01, only 325 drugs were being used in the reference hospital. The total cost of drugs used was Rupees 55,23,503 . Of these 325 drugs, 47(14.4%) drugs were Category A , consuming 70% of total expenditure, 73 (22.46 %) drugs Category B consuming 20% and rest
  • 10. 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 few from the trivial many, according to a defined set of criteria. ‡ Different decisions may be taken from the result of the ABC analysis.
  • 11. It gets harder to do correctly the longer you do them. Needs to be completed in the moment for the most accuracy. Still might reflect the biases of the data collector.
  • 12. At last I conclude that ABC analysis is a vital method for control the Inventory.