ABC Classification Set Criteria

For each ABC classification set, you select one criterion to value and rank each item included in the ABC classification set. The criterion that you select defines the ranks of items in the ABC classification set.

The following table lists the ABC classification set criteria to value and rank each item included in the ABC classification set.

ABC Classification Set Criteria	Usage
Current on-hand quantity	Use the current on-hand quantity of inventory. Assign the sequence number in the descending order of quantity.
Current on-hand value	Use the current on-hand quantity of inventory times the item cost. Assign the sequence number in the descending order of value.
Current item cost	Use the current item cost to rank items based on their individual item cost.
Historical number of transactions	Use the historical number of transactions (transaction history) for the specified time period. Assign the sequence number in the descending order of the number of transactions.
Historical usage quantity	Use the historical usage quantity (transaction history) for the specified time period. Assign the sequence number in the descending order of quantity.
Historical usage value	Use the historical usage value (transaction history). This is the sum of the transaction quantities times the unit cost of the transactions for the specified time period. Assign the sequence number in the descending order of value.
Previous cycle count adjustment quantity	Use the previous cycle count adjustment quantity. This is the sum of the value of all cycle count adjustments since the last ABC classification set submission date. Assign the sequence number in the descending order of quantity.
Previous cycle count adjustment value	Use the previous cycle count adjustment transaction value. This is the sum of the value of all cycle count adjustments since the last ABC classification set submission date. Assign the sequence number in the descending order of value.

For example, if you use Current on-hand quantity as your compile criterion, an item with an on-hand quantity of 10 units is of higher rank than another item with a quantity of 5 units. If you use the Current on-hand value criterion, and the first item has a cost of $10 per unit and the second item has a cost of $25 per unit, the second item has a higher value than the first item because $100 ($10*10 units) is compared to $125 ($25*5 units).