ABC-VED Matrix
ABC
Items kept in inventory are not of equal importance in terms of:
Rupee invested
Profit potential
Sales or usage volume
Stock-out penalties
So, identify inventory items based on percentage of total Rupee value, where “A” items are roughly top 20 %, “B” items as next 30 %, and the lower 50% are the “C” items
VED Analysis
V (Vital) Bring production to a loss of corporate image Significant
E (Essential) Dislocation of production schedule/loss of sales Special
D (Desirable) Temporary additional cost due to arrangement of a substitute. Considerable
ABC-VED Matrix
ABC Analysis
Grouping of items on the basis of annual/ monthly consumption value
A = Always (Best)
B = Better (Better)
C = Control (Good)
Emphasizes on classification of items on the basis of their criticality of use
V = Vital (Significant)
E = Essential (Specific)
D = Desirable (Considerable)
ABC-VED matrix is a hybrid model where-in every category (A, B, and C) of items is further classified into three sub-category (V, E and D) so that an in-depth consideration can be given to various items for the inventory management.
Items kept in inventory are not of equal importance in terms of:
Rupee invested
Profit potential
Sales or usage volume
Stock-out penalties
So, identify inventory items based on percentage of total Rupee value, where “A” items are roughly top 20 %, “B” items as next 30 %, and the lower 50% are the “C” items
VED Analysis
V (Vital) Bring production to a loss of corporate image Significant
E (Essential) Dislocation of production schedule/loss of sales Special
D (Desirable) Temporary additional cost due to arrangement of a substitute. Considerable
ABC-VED Matrix
ABC Analysis
Grouping of items on the basis of annual/ monthly consumption value
A = Always (Best)
B = Better (Better)
C = Control (Good)
Emphasizes on classification of items on the basis of their criticality of use
V = Vital (Significant)
E = Essential (Specific)
D = Desirable (Considerable)
ABC-VED matrix is a hybrid model where-in every category (A, B, and C) of items is further classified into three sub-category (V, E and D) so that an in-depth consideration can be given to various items for the inventory management.
