A method that sorts items in descending order of sales or usage value, divides them into groups A, B and C by cumulative share, and manages them differently according to their importance. It is done using a Pareto chart.
Japanese name: ABC分析
ABC analysis appears in 1 practice question across 1 topic, including Business Strategy and Accounting Basics.
Answer: C. Products 5 and 6
Total sales are 1,000 (that is, ¥10 million). Sorting in descending order and computing cumulative shares gives product 1: 38%, product 3: 64%, product 5: 77%, product 6: 85.5%, product 2: 91%, product 7: 95%, product 4: 98% and product 8: 100%. Products 1 and 3, at 70% or less, are A; products 5 and 6, over 70% up to 90%, are B; and the remaining four products are C. ABC analysis uses a Pareto chart to find the few important items that account for most of the total, so that inventory control and sales efforts can be weighted accordingly.
ABC analysis uses a Pareto chart to find the few important items that account for most of the total, so that inventory control and sales efforts can be weighted accordingly.
The annual sales (in ¥10,000) of eight products are: produc…As an Amazon Associate I earn from qualifying purchases.
Pareto chart Break-even point Contribution margin Depreciation Five forces analysis Fixed cost Income statement (P/L) Net present value (NPV) Patent Product life cycle