Abstract:
ABC method is the result of investigations by Italian economist
Vilfredo Pareto (1906). This method is commonly used in the analysis of
inventories, the turnover, costs, customers, suppliers etc.
As regards the management of inventories, on the basis of this method
lies finding that about 70% of the small number of items of inventories in
most industrial companies, representing about 10% of the total inventories,
20% the number of inventories items that hold about 20% of the total
inventories, while approximately 10% of significant items of inventories
represents about 70% of the total value of inventories.
ABC method allows analysis of the structure of turnover from the
grouping of products for sale in three groups, namely Group A, Group B and
Group C.
For a manager, the method is that it reminds them to focus on the
20% that matters. Of all the things you realize in a day, only 20% matter
indeed. Those 20% produce 80% of your results.
