ABC analysis in SIP tools
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Date
2020-05
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AIKTC
Abstract
According to what was mentioned, all the organizations need an appropriate inventory control and planning system in order to effectively manage their resources and inventories. Therefore, in order to create a perfect inventory control system, various inventory items should be classified into the significant categories based on appropriate criteria and standards. Various models and methods have been so far presented to classify inventory among which, ABC analysis approach is one of the most common methods which is widely used for planning andt5 inventory control.
Inventory classification based on ABC analysis allows the organization to classify its inventory into the significant categories. Generally, the above approach has been formed based on the Pareto Principle which is also known as “20-80” law. Regarding the organizations’ inventory, this principle will be expressed as follows:
In the manufacturing organizations, there are only a few inventories which mostly contribute to the cost of the annual consumption of the organization’s inventory system and there are only anew inventories which a little contribute to the dollar value of the annual consumption of the inventory system.
Given that the primary purpose of the inventory classification based on this approach is to create appropriate control levels for each inventory category, this question will be raised that whether the inventory classification based on single criterion ABC analysis will be able to meet all the needs of the organization’s inventory control system.
As a result, the organizations can apply proper control policies by identifying the most effective criteria in their inventory classification. This study has also tried to present proposed ABC model for the hostel mess stores, in order to evaluate the inventory control system of the studied in that. For this purpose, first, the criteria affecting the evaluation of the inventory control system, classification of inventory and the priority of each One of the criteria in the studied mess stores and the priority of each one of the criteria in each inventory category (A, B, C) have been identified and model will be proposed
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