ABC-/XYZ Analysis Introduction

UNIVERSIT?T

D U I S B U R G E S S E N

Campus Duisburg

Fakult?t f?r Ingenieurwissenschaften Abteilung Maschinenbau Institut f?r Produkt Engineering Transportsysteme und -logistik Keetmanstr. 3-9 47058 Duisburg

Telefon: 0203 379-2785 Telefax: 0203 379-3048 eMail: bernd.noche@uni-due.de

Prof. Dr.-Ing. Bernd Noche

ABC-/XYZ Analysis Introduction

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Quelle: Powerpoint-Folien: Uta Horstmann

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A short definition of ABC-Analysis

The ABC-Analysis represents a simple method of material classification in respect of value and

quantity. (G. W?he)

Expressed in a more general way it is a process in order to identfy important kinds of customers, suppliers or articles.

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The Pareto principle

The so called Pareto principle indicates that for many phenomenons the following is valid: 80 % of effects are reached by 20 % of causes.

The principle traces back to Vilfredo Pareto (Italian economist) who, related to Italy, had noticed that 80 % of property belonged to 20 % of the Italian population.

Vilfredo Federico Damaso Pareto 1848 - 1923

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However, the rule often is misunderstood: It seems that 80 % + 20 % = 100 %. But it can also be valid that: 80 % of effects are traced back to 10 % of causes.

The principle can also be applied recursively, and not only used for 20% of the reasons :

e.g. 64-4 Rule: e. g. (80 ? 16) % (20 ? 16)% 96-36 Rule: e. g. (80 + 16) % (20 + 16)% 64-4 Rule: e. g. from (80?80/100)% - (20?20/100)% 51,2-0,8 Rule: e. g. from (80?80?80/10000)% - (20?20?20/10000)%

Source: Wikipedia

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ABC classification

Cumulated

Value or

percentage100

Percentage share 90

of sales

80

70

60

50

C

40

B

30 A

20

10

10 20

30 40

50 60 70 80 90 100

Cumulated proportion (percentage)

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