What is abc analysis, Financial Management

Assignment Help:

Q. What is ABC Analysis?

ABC Analysis: - ABC Analysis is a method of controlling different items of inventory. Generally a firm has to maintain several different items as inventory. All these items aren't equally important. Thus it isn't desirable to keep same degree of control on all these items. The firm must give more attention to those items whose value is higher in comparison to others.

In this analysis all the items of inventory are classified into three categories:-

(i) In category 'A' those items are incorporated which are small in number say 15 percent of the total items however they are quite valuable the value being 70 percent of the total value of the inventory.

(ii) Category 'B' stands midway as well as consists of items which are 30 percent in number and 20 percent of the total value.

(iii) In category 'C' those items are comprised which are quite large in number say 55 percent of the total items but carrying little value say 10 percent of the total value of inventory.


Related Discussions:- What is abc analysis

Define the primary reasons that companies hold cash, What are the primary r...

What are the primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen eme

#scope or contents of financial functions, #what are the main points in sco...

#what are the main points in scope or contents of financial functions#

Explaqin advantage of any available cash discounts, Assume that you have be...

Assume that you have been consistently impressed by David and Tom Gardner of The Motley Fool since you first heard of their rather improbable rise to prominence in financial circ

Bajaj electronics caselet, how would you judge the potential profit of Baja...

how would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

Dividend policies, explain for factors influencing design for dividend poli...

explain for factors influencing design for dividend policies

Regarding the assigment below, a-ii, should i calculate the co-variance of ...

a-ii, should i calculate the co-variance of the 30 securities?

Short-term self-liquidating loans to business by bank. why?, Banks like to ...

Banks like to make short-term, self-liquidating loans to businesses.  Why? Banks like can see where the funds are likely to come from such that the borrower is able to use to m

M.r, capital structure

capital structure

Exchange rate changes decrease risk of foreign investment, Would exchange r...

Would exchange rate changes all time increase the risk of foreign investment? Discuss the condition within which exchange rate changes may actually decrease the risk of foreign inv

Settlement dates, What is Settlement date? Please provide me report on Sett...

What is Settlement date? Please provide me report on Settlement date. It is about 2000 words count report on topic Settlement date.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd