Defining a Part's ABC Classification

You define the importance of a part on the ABC Classification File (IC250E).  Valid values are A through E, with the most important parts defined as "A" and the least important parts defined as "E."   "A" parts are counted most frequently, usually every 1-2 days.  "E" parts are rarely counted (every 20-90 days); some companies choose never to count them.  The warehouse's materials manager assigns the counting frequency to each classification.

Inventory Control can classify your parts by:

1.   The lead time of the part from the Part Master File (DE100M).

2.   The standard unit cost.  For manufacturing warehouses, the cost is the accounting standard from the Part Master File.  For moving average cost warehouses, the cost is the accounting standard cost from the Warehouse Balance File record.

3.   The inventory value of the part (part cost times the amount in stock).

4.   The percentage of total inventory (inventory value of part divided by the total inventory value).

5.   The activity of the part (movement in stockkeeping units).

6.   Percentage of total activity in the warehouse for all parts (part activity amount divided by the total activity amount for the warehouse).

This automatic process can be performed separately for each warehouse.  You can also assign inventory classifications manually, or manually override the classification assigned by MAC-PAC.