Overview
The ABC classification is used in Inventory Analysis and Management and Cycle Count selection.
Application
To calculate ABC code classification for items.
Setup
Division Master > Settings/Default Tab
Fields
ABC "A" Item Percentage: Entry is a percent. "A" codes are assigned until the cumulative value exceeds the entered percentage.
ABC "C: Item Percentage: Entry is a percent. After the "A" value is reached, "B" codes are assigned until the cumulative value exceeds the percentage entered. For all items remaining, "C" codes are assigned.
Commodity Code > Misc Tab
Fields
ABC Reclassify: When checked, the item is a candidate for ABC reclassification.
Inventory Item Master > Cycle Count Tab
Fields
ABC Reclass Date: Date the item was reclassified.
Reclassify ABC: When checked, this item is a candidate for reclassification.
Previous ABC Class: The previous ABC Class assigned to the item.
ABC Class: The current ABC Class assigned to the item.
Calculation
Step 1 Value each item. The calculation is the unit cost times quantity On-Hand.
NOTE 1 When the Division Cost Method is Weighted Average Cost, the unit cost of an item is the cost in the Inventory Item Average Cost/Quantity > Avg Unit Cost Total field.
NOTE 2 When the Division Cost Method is Standard Cost, the unit cost of an item is Inventory Item Std Cost > Cumulative Standard > Standard Total.
Step 2 Sort items into decreasing monetary value.
Step 3 Assign "A" codes until the cumulative value of items exceeds the percentage for "A" item on the Division Master. The calculation of the value is ( "A" percentage x total inventory valuation).
Step 4 Assign "B" codes until the cumulative value of items exceeds the Percentage for "C" items set on the Division Master. The calculation of the value is ("C" percentage x total inventory valuation).
Step 5 Assign "C" codes to the remaining items.
Navigation
Calculate ABC Codes
Process
Fields/Buttons
Division: The Division in which to perform the calculations.
Calculate ABC Codes: Button
Cancel: Button
Steps
Step 1 Select Calculate ABC Code button.
Step 2 Check Job Status button will display. Use the Check Job Status button to identify when the calculation has been completed.
When the job has been completed, the item whose Inventory Item Master > Cycle Count Tab > Reclassify ABC indicator was checked when the function was started will have its ABC reclassified.
Step 3 Program update of the fields on the Inventory Item Master Cycle Count Tab. At the completion of the 'Calculate ABC Codes" program, the Inventory Item Master Cycle Count Tab fields will have been updated.
Fields
ABC Reclass Date: Date the ABC Classification Program was run (record updated with each run).
Reclassify ABC: When checked, it indicates this Item is a candidate to be reclassified.
Previous ABC Class: This was the value previously assigned to this record.
ABC Class: The ABC class is calculated on the ABC Reclass Date (the record may or may not be updated with each run based on criteria).
Step 4 Optional - Generate a PDF button to create a PDF.
Step 5 Optional - Export to Excel button to export a spreadsheet.
SEE ALSO
Division Master
Inventory Item Master
Inventory Commodity Code
Inventory Item by Project
Inventory Item Average Cost Quantity
Inventory Item Standard Costs
Inventory Item Master Cycle Count tab
