ABC analysis & cycle counting

[former_member633418]

Dear Gurus,

I am having doubt regarding ABC ananlysis & Cycle counting.

1. What is ABC analysis and how it can be used in SAP MM ?

2. What is cycle counting? Is there any relation b/w cycle counting and ABC analysis? If so kindly explain.

Kindly explain in detail. Thank you.

[Former Member]

Cycle Counting is periodic counting e.g. every 2 months, every 6 months etc. etc. Typically you would not want to count every material every 2 months so you carry out an 'ABC analysis' in order to categorise your materials. You set an ABC indicator against materials and this allows you to, for example, count your more valuable materials more often.

For example your set up could be:

'A' = most valuable

'C' = least valuable

Count:

'A' materials every 2 months

'B' materials every 6 months

'C' materials every 12 months.

Regards,

Nick