The ABC Classification Parameter (ABCP) page is used to set management parameters for stock items with similar management needs. Once established, these classifications are used throughout the inventory system to calculate and forecast stock levels, reorder points, and lead-time. The following diagram illustrates how the ABC Classification Parameter table is used along with the Inventory table and three batch processes to control stock levels.
Inventory Manager enters ABC Classification information on the ABC Classification Parameter (ABCP) page.
The Reorder Point Calculation batch process calculates the Safety Stock information using the Economic Order Quantity (EOC) stored in the ABC Classification Parameter.
The Forecast Demand Calculation batch process calculates and updates the forecasted demand for each stock item based on previous demand. The method used for an item’s demand is stored in the ABC Classification Parameter as Manual Setting, Non-Seasonal/Regular, and Seasonal.
The Lead Time Calculation batch process calculates the requisition and vendor lead time for each active stock item in inventory.
An ABC Classification Report is created.
The Rules tab on the ABCP page has the following fields:
Rule Parameter - The Rule Parameter field identifies the type of rule to evaluate.
Forecast Amount - The value of Forecast Amount will be determined by the Quantity in the Forecast tab of the Inventory Usage (INVNU) page multiplied by the Unit Price field on Inventory (INVN). These quantities will be summed for the number of years selected.
Forecasted Quantity - The value of Forecast Quantity will be determined by the Quantity in the Forecast tab of the INVNU page. These quantities will be summed for the number of years selected.
Historical Usage Quantity - The value of Historical Usage Quantity will be determined by the Quantity in the Issue tab of the INVNU page. These quantities will be summed for the number of years selected.
Historical Usage Amount - The value of Historical Usage Amount will be determined by the Quantity in the Issue tab of the INVNU page multiplied by the Unit Price field on INVN. These quantities will be summed for the number of years selected.
Lead Time (Days) - The value of Lead Time (Days) will be determined by the value of the Lead Time Adjustment field on INVN.
On Hand Amount - The value of On Hand Amount will be determined by the value of the On Hand Quantity field on INVNQ multiplied by the Unit Price field on INVN.
On Hand Quantity - The value of On Hand Quantity will be determined by the value of the On Hand Quantity field on INVNQ.
Unit Price - The value of Unit Price will be determined by the value of the Unit Price field on INVN.
Active - The value of Active will be determined by the Active field on INVN. Checked indicates True and unchecked indicates False.
First Received Date - The value of First Received Date will be determined by the First Receipt field on INVNQ. If this field is blank, the IS NULL operator will be true; otherwise, the IS NOT NULL operator will be true. When using the other operators, the condition will be determined by the number of days between the first receipt and the current date.
First Effective Date - The value of First Effective Date will be determined by the First Effective field on INVNQ. This condition will be determined by the number of days between the first effective and the current date.
Current ABC Classification - The value of Current ABC Class will be determined by the ABC Class field on INVN.
Comparison Operator - The Comparison Operator field identifies how values will be compared when evaluating the Rule Parameter. The "IS NULL" and "IS NOT NULL" operators are only valid for the "First Received Date" Rule Parameter. The "Active" Rule Parameter, may only use the "=" and "<>" operators.
Comparison Value - The Comparison Value field identifies value that will be compared against when evaluating the Rule Parameter. The comparison value must be formatted correctly to be evaluated.
Years to Evaluate - The Years to Evaluate field identifies the number of years that should be evaluated for the specified Rule Parameter.