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what is ABC analysis please describe briefly.
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Answer Posted / nasir
ABC analysis is a business term used to define an inventory
categorization technique often used in materials
management. It is also known as Selective Inventory Control.
ABC analysis provides a mechanism for identifying items
which will have a significant impact on overall inventory
cost [1] whilst also providing a mechanism for identifying
different categories of stock that will require different
management and controls[2]
When carrying out an ABC analysis, inventory items are
valued (item cost multiplied by quantity issued/consumed in
period) with the results then ranked. The results are then
grouped typically into three bands[3]. These bands are
called ABC codes.
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