because of that resource, I was able to understand and do my homework. Thank you, professor. nice, simple and very good procedure. always use him. I love it
I dont mean to be so offtopic but does anyone know a tool to log back into an Instagram account? I was stupid lost my login password. I appreciate any assistance you can give me
@Luciano Xavier thanks so much for your reply. I got to the site on google and Im in the hacking process atm. I see it takes a while so I will get back to you later when my account password hopefully is recovered.
Here's a tip. When creating an anchor to a cell, just highlight the cell name in the formula (F15) and hit F4. You can hit F4 to tab through options of anchoring on the column, row, both or none. Also, when summing, select the cell where you want the total and click Alt=. This will auto sum the data you selected.
Thanks a lot sir. It was a clear explanation. To make it better add some enthusiastic flavor to your voice that could create a lot more difference, but still a wonderful job..!!!
To apply this method , i need to extract the annual demand , the only data i have is ( On hand stock , average monthly consumption (APU ) , APU trend , demand variability ( COV ) ) .
This is a method to evaluate your inventory (categorize it based on value). While the example uses annual demand, you could just use stock on hand. We assume that this is the amount of inventory that you have on hand at any one time (this is your par level). Given the data that you have, this looks more like economic order quantity and safety stock. If you are trying to evaluate your inventory for an entire year, then you could multiple average monthly consumption by 12. If it is forward thinking (what might the inventory value look like in the future, then you could make adjustments based on trend and demand variability. You have to go back and determine what the question is asking. This method just categorizes your data based on value (high value items, medium value items, and low value items).
Very good explanation. Thank You Sir. I was having a doubt whether it is the cost of an item or the percentage of an item in total inventory that is classifying criteria.
Hello Sir. Sir you teach very well but one problem in the question that what we learn from the book that class B contain 20-25% of the total inventory and C almost 55% but the question you solved contain large amount of B than C.
Engineer Muhammad Imran This is true if you are looking at the number of items instead of the value. You will find that the ABC method is very similar to Pareto in that 20% of your inventory items may constitute 80% of the value of the inventory. ABC looks at the value of the inventory and not the number of inventory items.
@@geoffreychikwale9532 Percentage quantity is the value of the inventory item compared to the entire value of the inventory (value of inventory item divided by the sum total of the entire inventory value). As for the breakdown of categories (A,B,C), it is somewhat flexible but the A category should be around 80% of your inventory value. B category is 12-15 % and the C category is everything that is left (the remaining 5-8%).
@@geoffreychikwale9532 not going to lie, I have no clue. I am knee deep in my last four classes. I am an Aeronautics Major, this was just a class I had to take as a part of my minors in management. I am sure there is a video somewhere explaining quantity percentage. Sorry I can’t really be of no help man. Wish I knew.
Hi Cary, using the data from this example in your video, in determining the EOQ for the class A items would you use the class A item with the highest percentage or would you calculate the EOQ for each class A item? Your video on EOQ doesn't answer the query that is why I ask the question here. I am working with data that gives me a similar statistic and I'm tuck with calculating the EOQ, thus the question. Thank you.
+mycalabar I responded to your question posted in the comments to EOQ video. ABC analysis is a separate technique that has to do with classifying or categorizing your inventory. Economic Order Quantity has to do with ordering inventory. Therefore, you would calculate the economic order quantity for each inventory item. EOQ balances the ordering costs with the holding costs but does not necessarily evaluate the inventory from a value standpoint like ABC analysis.
WHAT IS VALUE , IS IT A INVESTMENT? IF INVESTMENT THEN WHAT KIND OF INVESTMENT ,LIKE THE AMOUNT SPENT BY THE COMPANY TO MAKE THE PRODUCT OR THE INVESTMENT DONE BY CUSTOMER TO PURCHASE THE PRODUCT ?
This is the value of your inventory. Most companies track it by the cost but wholesalers/retailers may want to base the value on the price to the customer. This method is a way to identify elements of your inventory that are of high value and therefore would have stricter inventory control measures.
The categories are still a certain percentage of the total inventory value, no matter how large the inventory. A larger number of total products would mean that there will be a larger number of products in each category.
Thank you. The videos are not of the highest quality. One of the days when I have more time, I need to redo some of them but I am happy that people find them useful.
Disappointed....was expecting a formula to automatically group AB&C. I have thousand and thousand of rows of this kind of data. It's too time consuming to do it this way. But your explanations were very good.
Christine Weiler The grouping is designed to be somewhat flexible. The most important part of this technique is simply sorting your inventory from the highest value to the lowest value. You probably want to have tighter controls and monitor inventory items at the top of the list versus those at the bottom of the list. You can easily calculate the percentage of inventory value for each item and sort the list very quickly with lots of data (thousands and thousands of rows). I wouldn't worry about the categories. This is simply an extra step to group your inventory into three categories based on inventory value. The most important element of this technique is the sorting of your inventory. Not all inventory items are of equal value and you need to know which ones are most important.
Very Good Video Sir but I have little confusion, In ABC Analysis, I have problem in data that some items having low unit price but too much quantity which result in high percentage individual value and some items with high unit price but low quantity which result in low percentage individual value in overall.I want to clarify that I arrange this data according to unit price or percentage value ( Largest to smallest)? Can u help me?
Mansoor Ahmad If you have an inventory with high unit prices, you may want to use just the unit prices to sort the data. This is an acceptable variation to ABC Analysis. Another variation is inventory items that are difficult to acquire and therefore, you have to manage these inventory items very carefully as compared to more common inventory items. ABC Analysis is all about managing your inventory strategically and not treating all inventory items as the same (same value to the company). For example, most small companies don't track the inventory of pencils, pens, and writing pads. They simply order more when they need more. However, other items like computers or electronic devices may be monitored much more closely. In fact, these inventory items are usually checked out to individuals and checked back in on a regular basis.
You could do that if the current amount of your inventory is the typical or average amount that you carry of each item. You are just trying to categorize your inventory to realize that not all inventory items are of equal value. Category A are your high valued items and they require tighter controls than Category C items.
As long as all of the units are listed as usage per week (all units are recorded using the same time period), you can multiple the unit price by the usage per week.
sir in abc analysis some items having low unit price but too much quantity which result in high percentage individual value and they not follow 10% of items covering 70% of total value and finally how to do graph
+Altamash khan The traditional way is to multiple unit price by quantity but some ABC analysis uses just the unit price. In defense of the traditional way, one may have an inventory item with low unit cost but a lot of it and therefore it does add up to a large percentage of your inventory value which could mean significant financial losses if something were to happen to it. If it is really necessary to have this amount or quantity (the assumption is made that they are following Just-In-Time inventory and they have just what they need), having large quantities does create some vulnerability or exposure (i.e. stolen, damaged, obsolete, etc.) and if it does constitute a large value of your inventory, one may want to keep a watchful eye on it. I usually do not worry about graphing this but you could do a column chart.
+Altamash khan It depends on what version of Excel you are using. On a PC, you would use the menu and Insert a Chart. On a Mac, you would use the Chart Tab. You want to highlight the inventory item name and the percentage (after the list is sorted from highest to lowest) and select a Column Chart. You can then edit the chart to identify all of the A items, B items, and C items. You can just add a text box or change the color of the column: each classification using a different color.
+First Name Yes, that is correct ABC Analysis includes all of your inventory to help you know what inventory items need to be tracked and to what degree. Inventory items categorized as A items would have the strongest controls, this type of item is often assigned to someone, usually has an inventory tracking sticker, and has to be signed out (issued). While C items, are usually keep in a common storage place and are used as part of the ongoing process. These may include things like pencils, markers, pads of paper, etc.
I was given a question in class! and to calculate the percentages, my lecturer took each Annual Usage (Demande) ÷ By the Total to get the percentage, But from your solution i saw you took The Annual Value(annual demande × cost) of each to divide with the Total Annual Value
@@abjohnson1740 You can do ABC Analysis just using the demand. This would categorize your inventory by the usage or demand with the highest demand or usage being in Category A. However, this doesn't account for items that may be very few but each item is worth a lot of money. I prefer to do ABC analysis based on the value of the inventory item (demand x cost). You could also do ABC analysis just using cost with the A category being those inventory items with the highest cost. If your lecturer just wants you to do ABC analysis based on demand, then just calculate the percentage of each inventory item based on the total number of items demanded. Category A would be those inventory items that constituted 75-80% of the total demand of the inventory.
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because of that resource, I was able to understand and do my homework. Thank you, professor. nice, simple and very good procedure. always use him. I love it
Aissata Traore me too 😂
I dont mean to be so offtopic but does anyone know a tool to log back into an Instagram account?
I was stupid lost my login password. I appreciate any assistance you can give me
@Lincoln Trent instablaster ;)
@Luciano Xavier thanks so much for your reply. I got to the site on google and Im in the hacking process atm.
I see it takes a while so I will get back to you later when my account password hopefully is recovered.
@Luciano Xavier It did the trick and I finally got access to my account again. I am so happy:D
Thanks so much, you saved my account!
I completed my assignment with ease after watching the video. Thank you Sir, it has been super helpful!
Glad it was helpful.
Here's a tip. When creating an anchor to a cell, just highlight the cell name in the formula (F15) and hit F4. You can hit F4 to tab through options of anchoring on the column, row, both or none. Also, when summing, select the cell where you want the total and click Alt=. This will auto sum the data you selected.
Omg thank you a million times over for this video…helped me tremendously
Clear, concise and easy to understand. Thank you. You just cleared up so much.
Thank you. I am glad you found it useful.
Thank you so much for the excellent explanation. I now know how to do an ABC Analysis!!!
thank you sir! you're a gift from heaven!!
because of that resource, I was able to understand and do my homework. Thank you, professor. nice, simple and very good procedure
Thank you sir, because of this video I will be able to implement an ABC cycle counting schedule at work.
thankyou sir good explanation I like your explanation its more simplified and help me to clear my exam doubt
Perfect, explained to where anyone can understand it and do it.
Thanks a lot sir. It was a clear explanation. To make it better add some enthusiastic flavor to your voice that could create a lot more difference, but still a wonderful job..!!!
To apply this method , i need to extract the annual demand , the only data i have is ( On hand stock , average monthly consumption (APU ) , APU trend , demand variability ( COV ) ) .
This is a method to evaluate your inventory (categorize it based on value). While the example uses annual demand, you could just use stock on hand. We assume that this is the amount of inventory that you have on hand at any one time (this is your par level). Given the data that you have, this looks more like economic order quantity and safety stock. If you are trying to evaluate your inventory for an entire year, then you could multiple average monthly consumption by 12. If it is forward thinking (what might the inventory value look like in the future, then you could make adjustments based on trend and demand variability. You have to go back and determine what the question is asking. This method just categorizes your data based on value (high value items, medium value items, and low value items).
Thank you from Bosnia. Whery nice explained.
This guy is JUST thrilled.
Thank you for the positive feedback
thanks alot Cary. I really gained alot. Great video. Keep up the good work
thank u so much,really helped me to prep for my university semester testttt
Best and simplest explanation
thank you so much for this, super helpful
Straight. No BS. Thank you.
Very good video, thanks for that!
amazing simple explanation...THANKS!!
Great video thanks man appreciate it a lot now I'm ready for my finals
Very good explanation. Thank You Sir. I was having a doubt whether it is the cost of an item or the percentage of an item in total inventory that is classifying criteria.
here the percentage of the item is the inventory value
Hello Sir. Sir you teach very well but one problem in the question that what we learn from the book that class B contain 20-25% of the total inventory and C almost 55% but the question you solved contain large amount of B than C.
Engineer Muhammad Imran This is true if you are looking at the number of items instead of the value. You will find that the ABC method is very similar to Pareto in that 20% of your inventory items may constitute 80% of the value of the inventory. ABC looks at the value of the inventory and not the number of inventory items.
Thank you sir, very good explanation
man i am new at this thank you very much Cary...cheers
I am glad that you found it useful.
@@carycountryman how do you find the percentage quantity?
@@geoffreychikwale9532 Percentage quantity is the value of the inventory item compared to the entire value of the inventory (value of inventory item divided by the sum total of the entire inventory value). As for the breakdown of categories (A,B,C), it is somewhat flexible but the A category should be around 80% of your inventory value. B category is 12-15 % and the C category is everything that is left (the remaining 5-8%).
@@carycountryman Thank You very much! I got it
such a great video, thanks for that Cary
Thank you, it was so helpful. 🙂
Thank you , it was really useful for me the get the final meaning of ABC analysis
You are welcome Seifi....
Good
Thank you for sharing Sir..
Thanks so much! Whew! Was going over my head here for a bit lol.
How do you calculate Quantity Percentage?
@@geoffreychikwale9532 not going to lie, I have no clue. I am knee deep in my last four classes. I am an Aeronautics Major, this was just a class I had to take as a part of my minors in management. I am sure there is a video somewhere explaining quantity percentage. Sorry I can’t really be of no help man. Wish I knew.
@@garthak1380 alright I understand. I thought you have an idea
That was so helpful, thank you so much❤
I am glad you found it helpful
Thank you so much! Super comprehensive I completely understand now :)
Super helpful sir ,thank you so much!
That was a great video. Thanks for making it!
This helped me a lot Thank You!
You should add the headings of column such as item, annual demand
I do have those headings. The additional columns are just calculations to determine where the cutoffs are for the various groups.
Thank you sir! a great help to my research :)
Splendid !
I am glad that you find these videos helpful and thanks for the feedback
Thank you
I am glad that you found it helpful. These videos were created some time ago but it appears that people still find them useful.
“...THOUSAND dollars...” LOL dude
Hi Cary, using the data from this example in your video, in determining the EOQ for the class A items would you use the class A item with the highest percentage or would you calculate the EOQ for each class A item?
Your video on EOQ doesn't answer the query that is why I ask the question here.
I am working with data that gives me a similar statistic and I'm tuck with calculating the EOQ, thus the question. Thank you.
+mycalabar I responded to your question posted in the comments to EOQ video. ABC analysis is a separate technique that has to do with classifying or categorizing your inventory. Economic Order Quantity has to do with ordering inventory. Therefore, you would calculate the economic order quantity for each inventory item. EOQ balances the ordering costs with the holding costs but does not necessarily evaluate the inventory from a value standpoint like ABC analysis.
Thank you for your video. It is really helpful :)
Thank you so much for this
WHAT IS VALUE ,
IS IT A INVESTMENT?
IF INVESTMENT THEN WHAT KIND OF INVESTMENT ,LIKE THE AMOUNT SPENT BY THE COMPANY TO MAKE THE PRODUCT OR THE INVESTMENT DONE BY CUSTOMER TO PURCHASE THE PRODUCT ?
This is the value of your inventory. Most companies track it by the cost but wholesalers/retailers may want to base the value on the price to the customer. This method is a way to identify elements of your inventory that are of high value and therefore would have stricter inventory control measures.
Good explanation
What if we have hundreds of products
The categories are still a certain percentage of the total inventory value, no matter how large the inventory. A larger number of total products would mean that there will be a larger number of products in each category.
NICE EXPLANATION
Thank you. The videos are not of the highest quality. One of the days when I have more time, I need to redo some of them but I am happy that people find them useful.
Its a nice video, same video is available in my channel, explained in a very easy way
Disappointed....was expecting a formula to automatically group AB&C. I have thousand and thousand of rows of this kind of data. It's too time consuming to do it this way. But your explanations were very good.
Christine Weiler The grouping is designed to be somewhat flexible. The most important part of this technique is simply sorting your inventory from the highest value to the lowest value. You probably want to have tighter controls and monitor inventory items at the top of the list versus those at the bottom of the list. You can easily calculate the percentage of inventory value for each item and sort the list very quickly with lots of data (thousands and thousands of rows). I wouldn't worry about the categories. This is simply an extra step to group your inventory into three categories based on inventory value. The most important element of this technique is the sorting of your inventory. Not all inventory items are of equal value and you need to know which ones are most important.
Nice
Very Good Video Sir but I have little confusion, In ABC Analysis, I have problem in data that some items having low unit price but too much quantity which result in high percentage individual value and some items with high unit price but low quantity which result in low percentage individual value in overall.I want to clarify that I arrange this data according to unit price or percentage value ( Largest to smallest)? Can u help me?
Mansoor Ahmad If you have an inventory with high unit prices, you may want to use just the unit prices to sort the data. This is an acceptable variation to ABC Analysis. Another variation is inventory items that are difficult to acquire and therefore, you have to manage these inventory items very carefully as compared to more common inventory items. ABC Analysis is all about managing your inventory strategically and not treating all inventory items as the same (same value to the company). For example, most small companies don't track the inventory of pencils, pens, and writing pads. They simply order more when they need more. However, other items like computers or electronic devices may be monitored much more closely. In fact, these inventory items are usually checked out to individuals and checked back in on a regular basis.
Cary Countryman Thank you alot sir
Great video. Extremely helpful!
Hello Cary :) Can I replace the annual demand with the current number of units at my inventory?
You could do that if the current amount of your inventory is the typical or average amount that you carry of each item. You are just trying to categorize your inventory to realize that not all inventory items are of equal value. Category A are your high valued items and they require tighter controls than Category C items.
Thats clear, thanks.
what if the given data is USAGE PER WEEK instead of ANNUAL DEMAND?? how am i going to solve that? thankyou
As long as all of the units are listed as usage per week (all units are recorded using the same time period), you can multiple the unit price by the usage per week.
Thank you so much, well explained
Thank you. I am glad that you found it useful.
can you plz tel how to do the analysis of suppliers when only purchase price is available
Purchase price is just another term for cost. Purchase price is the cost to the company to purchase that inventory.
Very helpful, thank you!
Glad it was helpful!
Thanks a lot!!
sir in abc analysis some items having low unit price but too much quantity which result in high percentage individual value and they not follow 10% of items covering 70% of total value and finally how to do graph
+Altamash khan
The traditional way is to multiple unit price by quantity but some ABC analysis uses just the unit price. In defense of the traditional way, one may have an inventory item with low unit cost but a lot of it and therefore it does add up to a large percentage of your inventory value which could mean significant financial losses if something were to happen to it. If it is really necessary to have this amount or quantity (the assumption is made that they are following Just-In-Time inventory and they have just what they need), having large quantities does create some vulnerability or exposure (i.e. stolen, damaged, obsolete, etc.) and if it does constitute a large value of your inventory, one may want to keep a watchful eye on it.
I usually do not worry about graphing this but you could do a column chart.
can you please tell me how to draw column chart
+Altamash khan
It depends on what version of Excel you are using. On a PC, you would use the menu and Insert a Chart. On a Mac, you would use the Chart Tab. You want to highlight the inventory item name and the percentage (after the list is sorted from highest to lowest) and select a Column Chart. You can then edit the chart to identify all of the A items, B items, and C items. You can just add a text box or change the color of the column: each classification using a different color.
+First Name Yes, that is correct ABC Analysis includes all of your inventory to help you know what inventory items need to be tracked and to what degree. Inventory items categorized as A items would have the strongest controls, this type of item is often assigned to someone, usually has an inventory tracking sticker, and has to be signed out (issued). While C items, are usually keep in a common storage place and are used as part of the ongoing process. These may include things like pencils, markers, pads of paper, etc.
Al
Thank you so much!
Your welcome. Glad to be of assistance.
thanks a lot sir
Your welcome. I am glad that you found it helpful
Thnk u
Thank You.
Thanks
thank you!
thanx buddy
sir thank you
thank you
Helpful :)
Thank you for ur valuable class sir
I'm having a question please
What is your question?
I was given a question in class! and to calculate the percentages, my lecturer took each Annual Usage (Demande) ÷ By the Total to get the percentage, But from your solution i saw you took The Annual Value(annual demande × cost) of each to divide with the Total Annual Value
I'm lose 😔
@@abjohnson1740 You can do ABC Analysis just using the demand. This would categorize your inventory by the usage or demand with the highest demand or usage being in Category A. However, this doesn't account for items that may be very few but each item is worth a lot of money. I prefer to do ABC analysis based on the value of the inventory item (demand x cost). You could also do ABC analysis just using cost with the A category being those inventory items with the highest cost. If your lecturer just wants you to do ABC analysis based on demand, then just calculate the percentage of each inventory item based on the total number of items demanded. Category A would be those inventory items that constituted 75-80% of the total demand of the inventory.
Thanks very Much!!!! Stay blessed!