Reviewing the ABC Analysis Report

Select Inventory Reports (G41111), ABC Report.

The ABC Analysis report (R4164) is based on the principle that a small number of items will account for the largest part of a company's business. A slightly larger number of items will account for a smaller but significant amount of business. The remaining large number of items, taken together, will account for only a small amount of business.

You can generate the R4164 report based on an item's total sales, gross margin, or on-hand value. The R4164 report ranks inventory items with a letter grade of A, B, or C (where A represents the items with highest total sales, largest gross margin, or largest on-hand value). You can also use different ranking percentages in each category. For example, the system could rank Item A based on percentage of sales and Item C based on gross margin. The R4164 report helps you determine which items control the inventory costs and profits.

You can use the R4164 as the basis for inventory cycle counts (in which A items are counted more often than C items).

You can run this report in proof or final mode based on how you set up the processing options. The first time you run the ABC Analysis report, you should run it in proof mode. Proof mode enables you to review the information without updating the item master and branch/plant records with the new ABC ratings.