ABC Analysis Overview

Inventory iconABC Analysis Overview

ABC analysis in Inventory lets you quickly identify which inventory items represent your company's greatest investment in terms of monetary value and turnover rate. This helps ensure that crucial inventory does not fall below minimum levels, and helps keep current balance figures for a item reconciled with the actual count.

The ABC Type value for a item is determined by running an ABC Analysis report, which multiplies the current YTD issued quantity by the last cost of the item. The items are then sorted in descending order of the dollar value reached by this calculation.

MAXIMO sets the type to A, B, or C based on a percentage that the system administrator sets in MultiSite. You can set the ABC type to N, for no category, to exclude this item from the ABC analysis.

For example, the parameters can be set like this:

Using the above values, the top 30% of items (by cost) would be type A, the next 30% of items would be type B, and the last 40% would be type C.

The ABC Analysis report also changes the cycle count frequency for the item, based on the ABC type and the count frequency. If the ABC type is set to N, the cycle count frequency will not be changed.

Count frequency should be set in the MultiSite application to the number of days for each ABC type.

For example, the count frequencies can be set like this: