1. 5-1 PERSEDIAAN MULTI ITEM

2. The ABC Inventory Classification System The ABC classification, devised at General Electric during the 1950s, helps a company identify a small percentage of its items that account for a large percentage of the dollar value of annual sales. These items are called Type A items.  Adaptation of Pareto’s Law 20% of the people have 80% of the wealth (in 1897 Italy) u Since most of our inventory investment is in Type A items, high service levels will result in huge investments in safety stocks. u Tight management control of ordering procedures is essential for Type A items.

3. For Type B items inventories can be reviewed periodically Items can be ordered in small groups, rather than individually. Type C items require the minimum degree of control Parameters are reviewed twice a year. Demand for Type C items may be forecasted by simple methods. The most inexpensive items of type C can be ordered in large lot, to minimize number of orders. An expensive type C items ordered only as they are demanded The ABC Inventory Classification System 102030405060708090100 Percentage of items Percentage of dollar value 100 — 90 — 80 — 70 — 60 — 50 — 40 — 30 — 20 — 10 — 0 — Class C Class A Class B

4. Copyright 2006 John Wiley & Sons, Inc.12-4 ABC Classification  Class A 5 – 15 % of units 5 – 15 % of units 70 – 80 % of value 70 – 80 % of value  Class B 30 % of units 30 % of units 15 % of value 15 % of value  Class C 50 – 60 % of units 50 – 60 % of units 5 – 10 % of value 5 – 10 % of value

5. Copyright 2006 John Wiley & Sons, Inc.12-5 ABC Classification: Example 1$ 6090 235040 330130 48060 530100 620180 710170 832050 951060 1020120 PARTUNIT COSTANNUAL USAGE

6. Copyright 2006 John Wiley & Sons, Inc.12-6 ABC Classification: Example (cont.) Example 10.1 1$ 6090 235040 330130 48060 530100 620180 710170 832050 951060 1020120 PARTUNIT COSTANNUAL USAGE TOTAL% OF TOTAL% OF TOTAL PARTVALUEVALUEQUANTITY% CUMMULATIVE 9$30,60035.96.06.0 816,00018.75.011.0 214,00016.44.015.0 15,4006.39.024.0 44,8005.66.030.0 33,9004.610.040.0 63,6004.218.058.0 53,0003.513.071.0 102,4002.812.083.0 71,7002.017.0100.0 $85,400 AB C % OF TOTAL CLASSITEMSVALUEQUANTITY A9, 8, 271.015.0 B1, 4, 316.525.0 C6, 5, 10, 712.560.0

7. References “Production & Operations Analysis” by S.Nahmias “Factory Physics” by W.J.Hopp, M.L.Spearman