Abc analysis: a classification of items in an inventory according to importance defined in terms of criteria such as sales volume and purchase volume. Abc classification

1. Supply-Chain Finance Costs: Costs associated with paying invoices, auditing physical counts, performing inventory accounting, and collecting accounts receivable. Does NOT include customer invoicing/accounting costs (See Order Management Costs).
2. Demand/Supply Planning Costs: Costs associated with forecasting developing finished goods, intermediate, subassembly or end-item inventory plans, and coordinating demand/supply.
Supply Chain-Related IT Costs: Information technology (IT) costs (in US dollars) associated with major supply chain management processes as described below. These costs should include:
* Development costs (costs incurred in process reengineering, planning, software development, installation, implementation, and training associated with new and/or upgraded architecture, infrastructure, and systems to support the described supply chain management processes),
* Execution costs (operating costs to support supply chain process users, including computer and network operations, EDI and telecommunications services, and amortization/depreciation of hardware)
* Maintenance costs (costs incurred in problem resolution, troubleshooting, repair, and routine maintenance associated with installed hardware and software for described supply chain management processes. Includes costs associated with database administration systems configuration control, release planning, and management).
These costs are associated with the following processes:
PLAN
1. Product Data Management - Product phase-in/phase-out and release; post-introduction support and expansion; testing and evaluation; end-of-life inventory management. Item master definition and control.
2. Forecasting and Demand/Supply Manage and Finished Goods - Forecasting; end-item inventory planning, DRP, production master scheduling for all products, all channels.
SOURCE
1. Sourcing/Material Acquisition - Material requisitions, purchasing, supplier quality engineering, inbound freight management, receiving, incoming inspection, component engineering, tooling acquisition, accounts payable.