23 05 2010

To enrich the qualitiy of my post i decided to present you some useful methods which i learned about during my product project.

The ABC-Analysis is an instrument which allows the classification of different products regarding their contribution to the corporate turnover. It is based on the Pareto Analysis which is also known as the 80/20 rule founded by Villefredo Pareto in the nineteenth century. It points out that 20 percent of the effort is repsonsible for 80 percent of the results. According to this rule 20 percent of the products are generating 80 percent of the turnover.

But the ABC-Analysis differs to the original Pareto Analysis regarding the fact that the products are subdivided in three different segments.

Diagram of an ABC-Analysis (Wannenwetsch (2006), Integrierte Materialwirtschaft und Logistik, p. 77.)

The range of A, B, C products differ between:

With the evaluation of an ABC-Analysis the most important products can be filtered out. Due to the fact that A products contribute most to the corporate turnover, improving them has the biggest effect on the performance of the company.(They should be considered most in change situations)

Used literature:

Chase, Aquilano, Robert Jacobs (2005), Operations Management for Competitive Advantage,p. 610.

Prokopenko (1987), Productivity management, p. 130.

Wannenwetsch (2006), Integrierte Materialwirtschaft und Logistik, p. 77.




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