Classification order method

In the classification order method, products are placed into 13 classes based on turnover. The classes are divided based on percentages specified in SA Administrator Options-Products-Replenishment. Your fastest moving stock should be classified as Class 1. Your slower moving stock should be in the higher class numbers. This list shows an example based on recommended percentages:

Class 1 Top 7.5% of products
Class 2 Next 7.5%
Class 3 Next 10%
Class 4 Next 10%
Class 5 Next 8%
Class 6 Next 8%
Class 7 Next 8%
Class 8 Next 8%
Class 9 Next 8%
Class 10 Next 8%
Class 11 Next 8%
Class 12 Next 9%
Class 13 Dead Stock

The products are classified according to their annual amount per warehouse. The annual amount is calculated based on the normal usage or override usage for a 12 month period times the current unit cost.

Product Administration Inventory Classification and Rank Report determines your product’s class based on the percentages specified in SA Administrator Options-Products-Replenishment. The product’s class determines the order quantity. If the product is a Class 1 product, you should purchase a one month’s supply. If the product is a Class 2 item, you should purchase a two month’s supply, and so on until you reach Class 12. You should purchase a one year’s supply.