Rank stock by value

An ABC analysis sorts items by value. A few items carry most of it, and those deserve counting, negotiating and watching. Most items carry little, and can be managed simply. Warehouse → Stock ABC does the ranking.

Run it

1. Open Warehouse → Stock ABC.
2. Choose the Population: Materials or Finished goods.
3. Choose Ranked on:
   • Stock value: quantity on hand times unit cost. It shows where the money sits right now, so a costly item nobody touches ranks high.
   • Usage value: what was issued to production and to customers in the Usage window, valued at the cost recorded when it was issued. This is the textbook ABC and combines value with turnover, so a cheap item that moves constantly ranks high.
4. Choose Valued at: Standard cost (stable and comparable, but only as fresh as it was last set) or Moving average (what the goods actually cost).
5. Pick the Currency and, for usage, the period: Last 30 days, Last 90 days, Last 6 months, Last 12 months, Year to date or a Custom range.

Read the result

Items fall into three classes: A (count them, negotiate them, watch them), B (review periodically) and C (keep simple: small money, many items). The table lists each item’s rank, class, code, quantity on hand, unit cost, stock value, quantity issued, usage value and cumulative share.

Things the report is careful about:

• Usage counts stock issued to production and to customers. Write-offs, stocktake corrections and transfers are not usage: a loss is not demand.
• Items with no cost figure on the chosen basis are not ranked, and the report says how many and how much stock they hold. They are not class C: an unrecorded cost is not a small one.
• Items priced in another currency than the one you chose are not ranked, and are named. Nothing is converted, because a mixed ranking would order items by exchange rate.

Every figure here is a cost figure, so you need cost visibility as well as inventory and reporting access.

Related

• Count stock
• Plan what to reorder and when