See below animation to understand how the numbers are crunched. These are similar calculations (instead of units, we calculate cost) The formula for this is, =SUMIFS(['# refers to running numbers (1,2,3….4692,4693)Ĭumulative Units %: This is a percentage of cumulative units in total. This means, 91 is the total number of units for first three ranked parts (parts # 8, 9, and 16). We can use RANK formula for Cost]],0) will tell us the rank for each total cost.Ĭumulative Units: Once we know the rank of each item, next we need to figure out how many total units are needed for items ranked less or equal.įor example, The number (#) of the third part (PT3959-waes) is 3. Rank: We need to figure out what rank each total cost is (in the total cost column). Total Cost: This is just a multiplication of unit cost & # of units columns Crunching the inventory data with formulas.
Calculate extra columns needed for ABC classification (Related: Introduction to Excel Tables) 2. You can set the table name from Design tab.
Once the data is in Excel, turn it in to a table by pressing CTRL+T. # of units (if this is blank, just type 1 in all rows).Your data should have at least these columns. Pull all the inventory (or parts) data in to Excel.
(related: ABC Analysis page on Wikipedia) ABC Analysis using Excel – Step by step tutorial 1. Given a list of items (part numbers, unit costs & number of units needed for assembly), how do we automatically figure which class each item belongs to?Īnd how do we generate below ABC analysis chart from it? So how do you make sure that your inventory tracking efforts are optimized so that you waste less time on 50 cent parts & spend more time on costly ones? Some of these parts are very costly (say few thousand dollars per part), while others are cheap (50 cents per part). Each car requires several parts (4,693 to be exact) to assemble. Imagine you are handling inventory at a plant that manufactures high-end super expensive cars. ABC analysis is a popular technique to understand and categorize inventories.
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