ABC Analysis

ABC Analysis

As per Oracle Inventory user guide "ABC analysis is a method of determining the value of items in your inventory, ranking your items according to a criterion and then grouping items into classes. "ABC" refers to the rankings you assign your items as a result of this analysis, where "A" items are more valuable than "B" items and so on."

To perform ABC analysis, the setups Steps are

1. Define ABC compile
2. Define ABC Classes
3. Define ABC Group
4. Define ABC Assignments
5. Update ABC assignments
6. Run ABC assignments report

Detailed Setup Steps are as follow. Use "V1"Inventory Org

Step 1) Define ABC Compile. Navigate to Inventory>ABC Codes>ABC Compile>Click New

#Give a unique ABC Compile name like "Mandeep Compile"

#In Content scope select organization if you want to do ABC ranking for all items assigned to this inv org V1. If you select Subinventory, then you need to provide a subinventory name and ranking will be done for the items define in item/subinventory window. In our case, lets take content scope as Organization.

#In Compile specification has a field called Criterion and there are 15 Choices in the list. Compile criterion used to rank all the item based on the selected value and assign ABC classes based on this.

Some of the lovs are defined below.

Ref:  http://docs.oracle.com/cd/A60725_05/html/comnls/us/inv/abcdef01.htm#r_critfld

In our case we will take 3rd choice: Historical Usage Value

# Take cost type as Frozen
# Forecast field will only get enabled if you have selected  " Forecasted usage quantity or Forecasted usage value". In that case you also need to enter Plan name.
# Enter a start and end date for the criterion

# Valuation scope used to determine the ranking of items. You must select organization if you have selected the organization in content.

After doing this setups, click on "Compile button" to run compile. This will fire a request to determine the values of each item assigned to this org and then use this to generate ABC Descending Value Report and then you can use this to assign item to ABC classes.

After this run "ABC Descending Value Report"

Step 2) Now define ABC Classes. Navigate as per screenshot below

ABC classes used to group item based on the valuation we determined in step 1

Step 3) Now define ABC Assignment groups

Assignment group assign the ABC classes with ABC compiles. you can also assign item to ABC Classes.

navigate as shown in below screenshot. Enter a  unique name in Group Name and assign Compile.

Now click on Group Classes and assign the classes which we have defined in step 2

Step 4) Click on Assign item Button to assign item to ABC classes and ABC Group

Here specify the cut of points for each ABC class. each ABC class should have at least one item assigned to it . You can mention sequence from descending value report or use inventory value or % of items or Value.

Here as it is vision instance values does't look similar but in real scenarios its really different.

Save your work. A request "Define ABC assignments" will be fired

Optionally you can use update assignments

Step 5) Now you can run "ABC assignments report"

Sample output is below

Thanks
Mandeep

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