Hoses only make up 2 percent of repair shop sales so these items should be ordered as needed or a very low level of inventory kept on hand.īefore we learn how to complete the analysis, you can download a free Excel template from our Media Gallery. Because filters do offer 20 percent of annual dollar revenue, they should be looked at as a re-order item based on inventory levels. Hose sales make up 2 percent of annual sales, so class this item as “C” Item Classificationsįrom the above example, we know our auto repair shop must keep plenty of oil on hand at all times because of its top seller demand status. ![]() Oil sales make up 78 percent of annual sales, so this inventory item is classified as “A”įilter sales make up 20 percent of annual sales, so class this item as “B” ![]() When looking at inventory and using this analysis, let’s look at a simple example of an auto repair shop inventory of oil, filters and hoses in the screenshot to the right (click to enlarge). ![]() An ABC analysis, or the A, the B and the C don’t represent words, but a certain class of inventory items.
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