The ABC classification is system used to classify parts sold by a company based on the annual consumption value or sales. The ABC classification is based on Pareto's principal that 20% of the goods sold account for 80% of the sales. The parts classified as an A part accounts for 70% - 80% of the sales, but account for 10% - 15% of the total parts sold by the company. The parts classified as a B part ...
The solution provides an examination of the ABC classification for inventory as defined and as applied to ordering.