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

Techniques of inventory control, Examine the reasons for holding inventorie...

Examine the reasons for holding inventories by a firm & also discuss the techniques of inventory control

Define the cash budget, Q. Define the Cash Budget? Cash Budget: - A cas...

Q. Define the Cash Budget? Cash Budget: - A cash budget is an estimation of cash receipts and cash payments for a future period of time. It is prepared to predict the cash requ

Fund raising and investment, Fund Raising and Investment: Fund commitme...

Fund Raising and Investment: Fund commitment requirement in Hedge Funds sometimes exceeds millions of dollars. In addition, high minimum investments are sometimes closed to new

Explain the meaning of - purchase consideration, Explain the meaning of - P...

Explain the meaning of - Purchase consideration The  type  of  offer  made  to  target  company's  shareholders  would have  a  big  impact on acceptance. Apparently the price

Explains the reason for the negative synergistic gains, What can be the rea...

What can be the reason for the negative synergistic gains for British acquisitions of U.S. firms? Negative synergies for British acquisitions of U.S. firms (united state firms) m

State the term- adequate working capital, State the term- adequate working ...

State the term- adequate working capital If a firm doesn't have adequate working capital, that is, it doesn't invest sufficient funds in current assets, it can become illiquid

What is substantive test, what is Substantive tests or transactions based a...

what is Substantive tests or transactions based auditing Tests to attain audit evidence to detect material misstatements in financial statements. Using analytical procedures an

Effective duration and convexity, Effective Duration and Convexity The ...

Effective Duration and Convexity The modified duration is a measure of the sensitivity of a bond's price to interest rate changes; the assumption made here is that the expected

What are the market conditions of cost of capital, What are the Market cond...

What are the Market conditions of cost of capital Security may not be readily marketable when investor wants to sell; or even if a continuous demand for security does exist, p

Forex, I am looking for assignment help on the topic FOREX. It would be gre...

I am looking for assignment help on the topic FOREX. It would be great if anyone help me.

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