【文章內(nèi)容簡介】 , the decision to buy the large quantity is justified. Firms that carry hundreds or even thousands of different part numbers can be faced with the impossible task of monitoring the inventory levels of each part number. In order to facilitate this, many firm39。s use an ABC approach. ABC analysis is based on Pareto Analysis, also known as the 80/20 rule. The 80/20 es from Pareto39。s finding that 20 percent of the populace possessed 80 percent of the wealth. From an inventory perspective it can restated thusly: approximately 20 percent of all inventory items represent 80 percent of inventory costs. Therefore, a firm can control 80 percent of its inventory costs by monitoring and controlling 20 percent of its inventory. But, it has to be the correct 20 percent. The top 20 percent of the firm39。s most costly items are termed A items (this should approximately represent 80 percent of total inventory costs). Items that are extremely inexpensive or have low demand are termed C items, with B items falling in between A and C items. The percentages may vary with each firm, but B items usually represent about 30 percent of the total inventory items and 15 percent of the costs. C items generally constitute 50 percent of all inventory items but only around 5 percent of the costs. By classifying each inventory item as an A, B or C the firm can determine the resources (time, effort and money) to dedicate to each item. Usually this means that the firm monitors A items very closely but can check on B and C items on a periodic basis (for example, monthly for B items and quarterly for C items). Another control method related to the ABC concept is cycle counting. Cycle counting is used instead of the traditional onceayear inventory count where firms shut down for a short period of time and physically count all inventory assets in an attempt to reconcile any possible discrepancies in their inventory records. When cycle counting is used the firm is continually taking a physical count but not of total inventory. A firm may physically count a certain section of the plant or warehouse, moving on to other sections upon pletion, until the entire facility is counted. Then the process starts all over again. The firm may also choose to count all the A items, then the B items, and finally the C items. Certainly, the counting frequency will vary with the classification of each item. In other words, A item may be counted monthly, B items quarterly, and C items yearly. In addition the required accuracy of inventory records may vary according to classification, with A items requiring the most accurate record keeping. Chapter IV Summary Time inventory management is now faced with the advent, through altruism or legislation, of environmental management has added a new dimension to inventory managementreverse supply chain logistics. Environmental management has expanded the number of inventory types that firms have to coordinate. In addition to raw materials, workinprocess, finished goods, and MRO goods, firms now have to deal with postconsumer items such as scrap, returned goods, reusable or recy