Examples of ABC Classification Item Ranking

The ranking of the same items changes depending on whether you select an individual subinventory or the entire organization for the content scope, as well as whether the valuation scope is subinventory or organization.

The following scenarios show how the ranking of the same items changes depending on the content and valuation scope. In all examples, item WIDGET1 has an on-hand quantity of 5 units in subinventory STORES1. The same item also exists in other subinventories in your organization, for a total on-hand quantity of 30 units in the entire organization. Item WIDGET2, has an on-hand quantity of 10 units in STORES1 and a total on-hand quantity of 20 units in the entire organization. Item WIDGET3, has an on-hand quantity of 20 units in STORES2 and a total on-hand quantity of 40 units in the entire organization.

The ABC classification set criteria is Current on-hand quantity.

Content Scope is Organization

If you select the content scope for the ABC classification set as organization, WIDGET1, WIDGET2, and WIDGET3 are included in the ABC analysis. In the ABC analysis, 40 units for WIDGET3, 30 units for WIDGET1, 20 units for WIDGET2 are used, and WIDGET3 is ranked higher than WIDGET1 and WIDGET2.

Content Scope is Subinventory

If you select the content scope for the ABC classification set as subinventory STORES1, only WIDGET1 and WIDGET2 are included in the ABC analysis because they both exist in STORES1. However, the value to use is determined by what you select in the valuation scope. If you select to restrict valuation to the subinventory, 5 units for WIDGET1 and 10 units for WIDGET2 are used, and WIDGET2 is ranked higher than WIDGET1. However, if you select to value the same items across the organization, 30 units for WIDGET1 and 20 units for WIDGET2 are used, and WIDGET1 is ranked higher than WIDGET2.