ABC Analysis

Description
ABC analysis is a form of inventory control or material cost control wherein we will be excising control over materials by classifying them into three categories. It is categorised as category A, B and C.

Why should we classify the material into three categories? Well, category A would be generally classed as 'highly important materials', category B as 'moderately important details' and C as 'least important materials'.

These three categories differ in value and quantity, where category A has high value but low quantity, and category C as low value and high quantity.

This video walks you through how you can calculate your control by splitting your materials into three sections. From there, you can see which is the most, moderate and least important materials. Then you can decide your control based on the category of materials.

Video length: 5 minutes 45 seconds