#Excel abc analysis how to
#Excel abc analysis plus
#Excel abc analysis series

The ABC method was first described by the applied behavioural scientist Sidney Bijou in a 1968 research paper (though note that the terms ‘ABC analysis’ or ‘ABC chart’ and the like, were coined later). It might be interesting to also repeat the above exercise on the other measure, monthly average use. ABC charts arose from a need for better methods for recording direct behaviour observations. Often a ratio of 20 A, 30 B, and 50 C is used, but there are also others that use 10 A, 20 B, and 70 C. However, there is no consensus as to what percentage is A, B, and C. A’s are the most common items, B’s the middle group, and C’s the least common ones. Then determine manually at which point the 80% level is hit / crossed (you can do this by formula as well if you like). The ABC analysis is nothing more than a Pareto analysis grouped into three levels.

#Excel abc analysis plus

Then apply a formula that works out the cumulative STD cost for each item plus the previous items, as a percentage of total STD costs. Then sort the data using STD cost as the first sort criteria.

What I would do, is pick one measure to use as the main determining factor - let's say STD cost. Your classifications should align with the type of inventory you hold and how your business is run. Classify Your Inventory The way you classify your inventory depends on what kind of business you’re running and your company’s objectives.

#Excel abc analysis how to

In any case, you may also find that no items account for EXACTLY 80% of anything - maybe 10 items account for 79%, and 11 items account for 83%, so you will need to decide how to handle that. To perform an ABC analysis for your business, follow these three steps: 1. You need to decide for yourself which measure you want to use as the driving criteria here - maybe STD cost, maybe monthly average use, but not both. I expect you will find that items that account for 80% of total STD cost do not actually account for exactly 20% of monthly average use. In other words, 80 of sales volume is generated by 20 of all products. It is an application of Pareto analysis (80:20’s law). 1, Sequence, Product number, Product Description, Cost per Piece, Yearly Usage, Yearly Turnover, of the Yearly. As noted, it is a fairly basic combination chart procedure.The 80-20 rule is not really a hard rule, it's a guide that is often roughly accurate, but rarely exactly accurate. 3.5 ABC analysis ABC analysis is an analysis of a range of items that have different levels of significance and should be handled or controlled differently. That should be real close to your picture.

#Excel abc analysis series

If Excel messed up, pull up the select data dialog and fix Excel's mistakes.ģ) Select the column I data series -> change series chart type -> lineĤ) Format the stacked column series to have not gap between. columns I, L, and M as three data series. M2 =MAXIFS($I$2:$I$34,$K$2:$K$34,K2)-L2 copy down to M34.Ģ) Select B2:B34,I2:I34,L2:M34 and insert chart -> stacked columnĢa) Check that Excel correctly parsed the data series - column B as the category axis labels. I know I will need to add two columns for the stacked column series.ġa) In column L, I enter the data/formulas for the 'bottom' stacked column series. Steps I took to create something similar to your chart (a line + stacked column chart approach):ġ) I find that a lot of chart questions involve spreadsheet work. As before, are you familiar with building charts in Excel? Are you familiar with building combination charts in Excel? Here is MSFT's help file for a simple line + column combination chart ( ). This picture looks like a line + stacked column or a line + stacked area or a scatter + stacked area.