Optimizing Inventory Management.ppt mmmmmmmmmx

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1. Optimizing Inventory Management: An Introduction to ABC Analysis Prioritize, Allocate, Succeed SUBMITTED TO—DR. JAGDEEP SINGLA SIR SUBMITTED BY --- SHIVAM SYAL ROLLNO.----CUHP23MBA082

2. Introduction Did you know that 80% of a company's sales typically come from just 20% of its inventory? This Photo by Unknown Author is licensed under CC BY-SA

3. ABC Analysis ABC analysis, also known as Pareto analysis or the 80/20 rule, is a strategic inventory management technique that categorizes items into three groups based on their importance or value: A, B, and C.

4. Principles and Criteria A, B, and C Categories: ABC analysis divides inventory items into three categories: A, B, and C, based on their significance to the business.

5. Classification Criteria Annual Consumption Value: Items are classified into A, B, and C categories based on annual consumption values. This value is calculated by multiplying the unit cost of each item by its annual usage quantity. Categorization Process: (1) Identifying Annual Consumption Value (2)Ranking Items (3) Categorizing Items

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7. Benefits of ABC Analysis Optimized resource allocation Improved inventory control Cost savings This Photo by Unknown Author is licensed under CC BY-SA

8. Conclusion In conclusion, ABC analysis is a powerful tool for optimizing inventory management. By categorizing items based on their importance, businesses can focus their efforts where they matter most, leading to improved efficiency, cost savings, and better decision-making.