1. ABC analysis in warehouse exercise 1

3. Pareto analysis
Many people are familiar with the so-called ’80/20 rule’, also known as the Pareto Analysis, which can be put to use with the ABC analysis for inventory management.

4. The ABC analysis
The ABC approach states that a company should rate items from A to C, basing its ratings on the following rules:
A-items are goods which annual consumption value is the highest; the top 70-80% of the annual consumption value of the company typically accounts for only 10-20% of total inventory items.

5. The ABC analysis
The ABC approach states that a company should rate items from A to C, basing its ratings on the following rules:
B-items are the interclass items, with a medium consumption value; those 15-25% of annual consumption value typically accounts for 30% of total inventory items.

6. The ABC analysis
The ABC approach states that a company should rate items from A to C, basing its ratings on the following rules:
C-items are, on the contrary, items with the lowest consumption value; the lower 5% of the annual consumption value typically accounts for 50% of total inventory items.

7. Close day to day control
ABC analysis
Percentage of items
Percentage value of annual usage
Class A items
About 20%
About 80%
Close day to day control
Class B items
About 30%
About 15%
Regular review
Class C items
About 50%
About 5%
Infrequent review

8. ABC Analysis A Items 80 – 70 – 60 – 50 – 40 –
Percent of annual dollar usage
80 –
70 –
60 –
50 –
40 –
30 –
20 –
10 –
0 –
| | | | | | | | | |
Percent of inventory items
A Items
B Items
C Items
Figure 12.2

9. ABC analysis in warehouse = based on criteria
Frequency of removals (releases) from warehouse.
Volume of removals

10. Cumulative release share [%] Cumulative goods share [%]
ABC analysis No
Item
Quantity of releases
Release share[%]
Cumulative release share [%]
group
Goods share [%]
Cumulative goods share [%] 1. 2. 3. 4. 5. 6. 7. 8. 9.
10.
RAZEM: 1 2 4 6 7 8 10 3 5 9

11. Cumulative release share [%] Cumulative goods share [%]No
Item
Quantity of releases
Release share[%]
Cumulative release share [%]
group
Goods share [%duc]
Cumulative goods share [%] 1. C 10
25,0 A
10,0 2. D 9
22,5
47,5
20,0 3. B 7
17,5
65,0
30,0 4. I 6
15,0
80,0
40,0 5. F 2
5,0
85,0
50,0 6. G
90,0
60,0 7. H
95,0
70,0 8. E 1
2,5
97,5 9.
100,0
10. J
0,0
TOTAL: 40

12. Cumulative release share [%] Cumulative goods share [%]
Analiza ABC - praktyka No
Item
Quantity of releases
Release share[%]
Cumulative release share [%]
group
Goods share [%]
Cumulative goods share [%] 1. C 10
25,0 A
10,0 2. D 9
22,5
47,5
20,0 3. B 7
17,5
65,0
30,0 4. I 6
15,0
80,0
40,0 5. F 2
5,0
85,0
50,0 6. G
90,0
60,0 7. H
95,0
70,0 8. E 1
2,5
97,5 9.
100,0
10. J
0,0
TOTAL 40
A: share of releases<= 80%
B: 80% - 95% of releases
C: others 5%

13. ABC analysis

14. ABC analysis A B C

15. Cumulative item share [%] Cumulative goods share[%]
ABC analysis No
Item
Number of items
item share [%]
Cumulative item share [%]
GROUP
Goods share[%]
Cumulative goods share[%] 1. H
3990
66,5
66,50 A
10,0 2.
810
13,5
80,0
20,0 3. I
520
8,67
88,67 B
30,0 4. D
290
4,83
93,50
40,0 5. E 90
1,50
95,00
50,0 6. G 85
1,42
96,42 C
60,0 7. 80
1,33
97,75
70,0 8. 75
1,25
99,0 9. F 60
1,00
100,0
90,0
10. J
0,00
TOTAL:
6000

16. ABC analysis No According to frequency of releases
According to volume of releases
Item
Group 1. C A H 2. D 3. B I 4. 5. F E 6. G 7. 8. 9.
10. J

17. Acc.to frequency of releases According to volume of releases
Analiza ABC - praktyka No
Item
Acc.to frequency of releases
According to volume of releases 1. A C 2. B 3. 4. D 5. E 6. F 7. G 8. H 9. I
10. J

18. ABC
The warehouse has 10 types of pasta: stars, bows, slices, shells, threads, strands, fusilli, triangles, ribbons and bunnies. Each of the pastas is packed in bulk packaging of the same dimensions and weight. 10 orders completed. Each of them corresponded to the issued external edition document. The type of goods and the number of collective packaging issued for subsequent Wz documents are given below. Perform ABC analysis by frequency of releases and volume of releases POINTS : 10 

19. ABC
Wz 1. - shells: 22, fusilli: 4, triangles: 32, ribbons: 1, bunnies: 1045
Wz 2. - stars: 10, shells: 5, fusilli: 1.
Wz 3. - shells: 6, fusilli : 2, ribbons: 4.
Wz 4. – fusilli: 10.
Wz 5. - shells: 15, fusilli: 3, triangles : 48, ribbons:6.
Wz 6. stars: 32, bows: 45, shells: 21, threads: 405, strands: 13, fussilli: 7, triangles : 42, ribbons: 15, bunnies: 950.
Wz 7. - shells: 39, fusilli: 6.
Wz 8. - shells: 9, fusilli: 1, triangles : 76, ribbons: 4.
Wz 9. - shells: 10, strands: 17, fusilli: 1, triangles : 22, ribbons: 9.
Wz shells: 18, fusilli: 3, triangles : 40, ribbons: 1. .

20. Cumulative release share [%] Cumulative goods share [%]No
Item
Quantity of releases
Release share[%]
Cumulative release share [%]
group
Goods share [%duc]
Cumulative goods share [%] 1. 2. 3. 4. 5. 6. 7. 8. 9.
10.
RAZEM:

21. Cumulative item share [%] Cumulative goods share[%]No
Item
Number of items
item share [%]
Cumulative item share [%]
GROUP
Goods share[%]
Cumulative goods share[%] 1. 2. 3. 4. 5. 6. 7. 8. 9.
10.