WILLIAMS INVENTORY CONTROL 4/12/95
DSP01 ABC INVENTORY CLASSIFICATION DETAIL
Company 001
Warehouse BEL
Submit Request
Update ABC Class Y
Print ABC Report Y
ABC Lead Standard Inventory Pct Inv Activity Pct Act
Cls Time Unit Cost Value Value Amount Amount
A 80.0
B 95.0
C 100.0
D
E
Activity Variables :
Number of Months History
Future Horizon Date
F2=Command F3=Exit F9=Report Request
F16=Change Printer
An ABC classification request is used to classify all the parts in a particular company/warehouse into a category from A to E.
One or more of the following selection criteria may be used; lead time, standard unit cost, inventory value, percent of inventory value, activity amount and percent of activity amount. A combination of activity amount and inventory value parameters may not be entered in the same request.
For each requested criterion, the classification process will calculate a suggested class for each part processed. The overall classification will be dictated by the highest class suggested by any one criterion.
If the automatic update has been requested, the overall classification is used to update the part's ABC class within the requested company/warehouse.
COMPANY/WAREHOUSE
Required on the Function Select screen. Display only on the Detail screen. This is the company/warehouse to be classified. Must be a valid company/warehouse combination.
SUBMIT REQUEST
Required. Enter X to submit the request.
UPDATE ABC CLASS
Required. Enter Y to update the ABC class for each part in the requested warehouse automatically or N to recommend ABC classifications without updating.
PRINT ABC REPORT
Required. Enter Y to print the ABC classification report or N to perform the classification without any report.
ABC CLASS
Display only. Five ABC classifications (A-E) are available. 'A' class items are the most critical to the business and 'E' items are the least important. Classification parameters need not be specified for all five of the classes.
If you wish to use any one of the factors as a classification criterion, you must enter a parameter for Class A and may optionally enter a value for classes B - E. The corresponding value for the part will be compared to the entered parameter during the classification process. With the exception of the inventory value percent and activity percent, the classification is as follows. If the value for the part is greater than or equal to the Class A parameter, the part is assigned to Class A. If it is less than the Class A parameter, it is compared to the B Class parameter in the same way. The same comparison continues down to the D Class. At this point, if the value for the part is less than the D parameter it is automatically classified as E. The E Class parameter is not considered in the classification process.
If a parameter is left blank, any parts that have a value less than the parameter for the previous class will be placed in this class.
If a class parameter is set to the same value as the previous class, parts will never be placed in this class.
LEAD TIME
Optional. The leadtime parameter is used to place parts with longer lead times in higher classes. Enter the lead time days against each desired ABC class. A part qualifies for a particular class if its lead time exceeds or equals the entered lead time.
STANDARD UNIT COST
Optional. The standard unit cost parameter is used to classify the most costly items in a higher ABC class. Enter the standard cost against each desired ABC class. A part qualifies for a particular class if its standard cost exceeds or equals the entered cost.
INVENTORY VALUE
Optional. The inventory value parameter is used to classify items in a higher ABC Class. Enter the inventory value for each desired ABC class. The inventory value is calculated by multiplying a part's total inventory at the requested warehouse by its standard cost. A part qualifies for a particular class if its inventory value exceeds or equals the entered value.
PERCENT OF INVENTORY VALUE
Optional. The percent of inventory value parameter is used to classify the items of greater value in higher ABC classes, up to a certain percentage. It differs from the inventory value approach in that it uses a percentage rather than a straight value to classify inventory. Parts are assigned to an ABC Class based on the cumulative percentage of total inventory value across the warehouse. The value is calculated by extending the part's total inventory by its standard cost.
Specifically, if A parts are 10% of the inventory value, then all parts that have inventory values adding up to 10% of the total inventory value are classified as A parts. B parts then need to include the 10% for the A parts plus the chosen specification for B parts, such as 20%. This total (10% + 20%) indicates that 30% of the total inventory value is comprised of A and B parts. C parts then need to include the 30% of the B parts plus the chosen specification for C parts, such as 30%. Consequently, each classification needs to include the percentage from the class above until one of the parts is specified as 100%, indicating that 100% of the parts are classified as A, B, C, or D.
ACTIVITY AMOUNT
Optional. The activity parameter is used to classify parts for which the value of inventory movement is greater in higher ABC classes. Enter the activity amount for each ABC class. The activity amount is expressed as a multiple of a part's historical or projected usage and its standard cost. The future horizon date and number of months history fields are used to specify the amount of activity to be included in the calculation. A part qualifies for a particular class if its activity amount equals or exceeds the entered value.
PERCENT OF ACTIVITY AMOUNT
Optional. Enter the percentage of past or future activity that must be held in each desired ABC class and higher classes. Parts are classified based on the cumulative percentage of total activity value across the warehouse. The future horizon date and the number of months history fields are used to define the amount of activity to be considered.
NUMBER OF MONTHS HISTORY
Optional. Enter the number of months history to be considered when the activity amount or activity percent classification criteria are requested. Up to 12 months' history may be processed. The future horizon date may be used instead of or in combination with the months history.
FUTURE HORIZON DATE
Optional. Enter the future date up to which projected activity will be calculated. This may be entered when the activity amount or activity percent classification criteria are requested. The number of months history NUMBER OF MONTHS HISTORY may be used instead of or in combination with this date.
COMMAND KEYS
Enter - Process request.
F2 - Display a window where a fast path option or mnemonic can be entered. Fast path allows the next menu selection to be made directly from this screen. When the window is displayed, pressing F3 will remove it.
F3 - Exit program without update.
F4 - Display a list of values for the field where the cursor is positioned. If you select one of the items from the list, it will be returned to the application screen.
F9 - Enter the ABC classification report request screen.
F16 - Used to change the printer location or output queue to which the report will be routed.
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