PRESENTATION ON ABC

ANALYSIS

FROM-
DHRUV MAHESHWARI
PGDM
SEC-A
ROLL NO-M08041
 A B C Analysis
Always Better Control is an analytical techniques for
classification of inventory items was first introduced
by an AMERICAN FIRM- GENERAL ELECTRIC
COMPANY.
According to this analysis, there are three categories
of inventory items A, B and C type . Depending upon
their percentages of consumption.
 Contd…

 The significance of this analysis is that a very close ctrl is

exercised over the items of -
 A Category will include more expensive items with high
investment & it will require more intensive control.
 B Category consists of the items accounting for the next
largest investment.
 C Category consists of the items of a large number of items
of inventory accounting for a small rupee investment.
 Advantages Of ABC Analysis
1. It helps the material manager to exercise selective control
and focus his attention only on a few items when he is
confronted with lakhs of stores items.
2. Strict control over items involving good deals of
investment.
3. Minimum of inventory costs-both procurement and
carrying.
4. Sufficient safety of low value or C group of items.
 Limitation

ABC analysis in order to be fully effective should

be carried out with standardization and
codification. ABC analysis is based on grading the
items according to the importance of
performance of an item that is by VITAL,
ESSENTIAL and DESIRABLE (VED ANALYSIS)
analysis.
 FOR EXAMPLE:-

Items units unit cost

1 10000 30.40
2 5000 51.20
3 16000 5.50
4 14000 5.14
5 30000 1.70
6 15000 1.50
7 10000 0.65
THANK YOU