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How do I perform an ABC analysis for Stellar Inc. using the 75:15:10 criteria for inventory management?

Business/Management

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5 steps

Here's the ABC analysis for Stellar Inc.:

i. Use the 75:15:10 criteria to categorize their goods under ABC Analysis

  1. Calculate the total value for each item by multiplying Demand by Price.

  2. Calculate the total inventory value by summing all individual item total values.

  3. Calculate the percentage of total value for each item.

  4. Sort items by percentage of total value in descending order and calculate the cumulative percentage.

  5. Categorize items into Class A, B, or C based on the 75:15:10 criteria (Class A

    approx. 75%, Class B: approx. 15%, Class C: approx. 10%).

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