Perform ABC Analysis (whina6210m000)

Use this session to perform an ABC analysis. Based on this analysis, the items are classified according to issues by warehouse.

The total actual issue of items in the range is calculated for the warehouses in the period of the twelve months to date (so the maximum number of months is twelve).

Next, the inventory turnover can be calculated based upon:

  • Standard Cost
  • Sales Price
  • Quantity: the issue of the item

If the item is used only for part of the period, turnover is calculated as if the item were used for the entire period.

Based on turnover, the ABC code is determined as follows:

  • The upper boundary of items is classified A.
  • The middle boundary of items is classified B.
  • The lower boundary of items is classified C.

This ABC classification is based upon the values of the Boundary Class A/B/C fields in the Inventory Analysis Parameters (whina0100m000) session.

Note: 

You can also manually assign an ABC classification to an item warehouse combination in the following sessions:

  • Item - Warehousing (whwmd4600m000)
  • Item Data by Warehouse (whwmd2110s000)

Field Information

Warehouse

The From and To fields define a range of: warehouse codes.

Site

The From and To fields define a range of: sites.

Item Group

The From and To fields define a range of: item groups.

From Item

The From and To fields define a range of: items.

Consider Demand From

Select the start date of the period for which the ABC analysis must be performed.

The demand is calculated for the selected date to the current date. The data is analyzed based on the inventory issued by the warehouse for the selected period. In the Item Issue by Warehouse and Period (whinr1530m000) session, you can view the actual demand quantity in the Actual Demand field.

To calculate the future demand you must select the date in the Consider Demand To field.

Default value

The current date minus one year.

Include Future Demand

If this check box is selected, Consider Demand To field is enabled.

You can perform the ABC analysis for the planned or future period.

Consider Demand To

Select the end date of the period for which the demand must be calculated.

The ABC analysis can be performed based on the actual and planned usage of the inventory. The future demand is calculated based on the planned inventory transactions and demand forecasting.

ABC Base
ABC Base

The ABC analysis can be calculated in three ways:

  • Standard Cost

    The items are classified based on turnover which is calculated as follows:
average annual issue * standard cost

  • Sales Price

    The items are classified based on turnover which is calculated as follows:
average annual issue * sales price

  • Quantity

    The items are classified on the basis of the average annual issue (= quantities sold). The results of the analysis may contribute to an optimal warehouse layout.
Note: 

The Currency field is only relevant for the following ABC Base field's values:

  • Standard Cost
  • Sales Price
Options
Currency

The currency base.

From the Tools menu, choose Rotate Currency to switch home currencies.

If this check box is selected, the ABC analysis (including error report) is printed.

Update Manually Changed ABC Codes

The ABC Code field of the Item - Warehousing (whwmd4600m000) session can be changed manually. The Manually Entered ABC Code check box is then selected. These items can be excluded from the ABC analysis.

If this check box is selected, all items are included in the ABC analysis. If this check box is cleared, only those items are included in the ABC analysis for which the Manually Entered ABC Code check box is cleared.

Site

The ABC analysis can be performed for each item and for each item - warehouse combination.

If this check box is selected, ABC analysis is performed by warehouse.

Note: 

ABC analysis is performed for:

  • All the items in the company when the Item check box is selected.
  • The range of warehouses is specified in the Warehouse field.

If Item check box is cleared and Warehouse check box is selected, ABC analysis is performed only for the items in the specific warehouse.

Warehouse

The ABC analysis can be performed for each item and for each item - warehouse combination.

If this check box is selected, ABC analysis is performed by warehouse.

Note: 

ABC analysis is performed for:

  • All the items in the company when the Item check box is selected.
  • The range of warehouses is specified in the Warehouse field.

If Item check box is cleared and Warehouse check box is selected, ABC analysis is performed only for the items in the specific warehouse.

Item

The ABC analysis can be performed for each item and for each item warehouse combination.

If this check box is selected, ABC analysis is performed by item.

Note: If this check box is cleared, and Warehouse check box is selected, ABC analysis is performed only for the items in the specific warehouse.
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