How To

The task is to identify the products that have the highest annual consumption value regarding their portion of their annual consumption. Thus what we have to do is to conduct an ABC - analysis in order to structure the product range in A, B and C products. For this example the procedure is the following:

  1. Calculation of the annual consumption value.
  2. Sorting of the products regarding their annual consumption value in decreasing order.
  3. Calculation of the ratios of the annual consumption per product and accumulation of it.
  4. Calculation of the ratios of the annual consumption value per product and accumulation of it.
  5. Arrangement in A, B and C product groups.

An orientation for the arrangement is given by:

Product group
Value percentage
Percentage of
product range
A
60% - 80%
10% - 20%
B
10% - 20%
20% - 30%
C
5% - 10%
60% - 70%

See also Module "Logistics Areas and Logistics Systems" , Chapter 4.4.