What is ABC analysis?

Business & Management
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In materials management,the ABC analysis is an inventory categorization technique.ABC analysis divides an inventory into three categories A items with very tight control,accurate records.B items with less tight control,good records.C items with simplest controls possible,minimal records. The ABC analysis helps in identifying different categories of stock that will require different management and controls.

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#3

ABC Analysis is one of inventory management technique used by inventory managers to segregate inventory into categories based on their consumption value and have better control over them.

  1. ABC analysis provides a mechanism for identifying different categories of activities/stocks/items that will require different management and controls.

  2. “A class inventory” contains items that account for 70% of total value.

  3. “B class inventory” contains items that account for 20% of total value.

  4. “C class inventory” contains items that account for 10% of total value.

  5. ABC analysis is the material management technique which helps energy audit process to achieve the goal of energy audit.

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