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

Explain the savage friedman hypothesis, Question: (a) Describe the axio...

Question: (a) Describe the axioms of utility. (b) An economic agent has a logarithmic utility function, U(W) = lnw and has initial wealth $20,000. She is offered the sub

What are the financing methods, Q. What are the financing methods? - Th...

Q. What are the financing methods? - The export transaction could be correlated to a bill of exchange. If this bill was established (guaranteed) by the bank it could be discoun

Required rate of return , Required Rate of Return (R i )  The required...

Required Rate of Return (R i )  The required rate of return (Ri) is the minimum rate of return that a project must generate if it has to receive funds.  It’s thus the opportun

Price volatility characteristics of option-free bonds, As we know tha...

As we know that price of option-free bond changes in the opposite direction from a change in bond's required yield, Table 1 and figure 1 explains this feature of

Measuring interest rate risk , Investors are always interested in est...

Investors are always interested in estimating the price sensitivity of a bond to change in market interest rates. Let us study how prices change both in terms of

Display profit diagrams for long stock and for short stock, Question: (...

Question: (a) A stock currently sells for $80 and a put option with an exercise price of $80 currently sells for $2. Find the percentage gain to an investor in the common stock

What is share exchange, What is Share exchange    Predator company off...

What is Share exchange    Predator company offers their shares in exchange for target company's shares. So target shareholders become part of predator shareholders and so have

Benefits of securitization, Securitization has attracted a widespread...

Securitization has attracted a widespread application of the technique to residential mortgage loan, the easiest class of a financial asset to securitize, and to

Define when u.s. dollar weakens in foreign exchange market, What does it me...

What does it mean when the U.S. dollar weakens in the foreign exchange market? While the U.S. dollar weakens in the foreign exchange market one U.S. dollar buys smaller amount un

Explain about the market-based and bank-based systems, Explain about the ma...

Explain about the market-based and bank-based systems. A clear distinction between market-based in USA and UK and bank-based systems as in Germany, Japan and France define by s

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