Distributors and Retailers may have
hundreds to thousands of items. As a result, it can become extremely
to manage all of these items.
Analysis can be quite
useful to help management focus on
a smaller number of items, which typically account for a high
percentage of the
volume or value of all items in inventory (called the “Pareto
“80/20” rule). Thus it is used to establish policies that focus on the
critical parts and not the many trivial ones
ABC system organizes
its inventory into three (or more)
groups - A, B and C.
A items are a
relatively small number of items that
generate a large percent of a company’s unit or sales volume and
account for a large percent of the company’s inventory investment. B
the next largest group and the next largest investment. C items
represent a small volume of sales dollars or volume but the greatest
terms of number of items.
into A, B and C items, company’s
can determine the levels of inventory to hold and the types of
control procedures to use.
same type of classifications also applies to
the forecasting process in terms of forecasting methods used, time and
spent on the forecasting process as well as targeted and actual
LPA, LLC is a
Supply Chain software and consulting
business offering affordable, easy-to-implement solutions to complex
planning problems. Our Managing Partners have over 40 years of combined
Supply Chain and Information Systems experience.
Contact us today to receive a Brochure along with our
MS-Powerpoint ® Overview
slide show which describes our products general capabilities (we also
have a more detailed PSI
Planner "Guided Tour" slideshow available upon request).
After viewing the slide show, let us know if you'd also like
to schedule a LIVE WEB DEMO for a more detailed understanding
of its capabilities and how it can make your Supply Chain "Lean" by
improving your company's service levels and inventory turns (click on "News
and Events " for more details).
Our company also offers Supply Chain consulting services at
reasonable rates. We invite you to contact us for a consultation
regarding your specific needs.
Read current information on Supply
Chain Management Inventory Classification