7/25/2019 ABC_Analysis_Excel_new2.doc

1/5

ABC Analysis in Excel

This document explains how to do ABC analysis of inventory items in Excel. We will useExample 12.15 on paes !!"#!5$ as an example. The actual assinment will %e a separatehandout and will %e %ased on a different pro%lem.

What you will learn from this handout

1. To do an ABC analysis of inventory items in Excel2. To sort data in Excel& usin the data in a particular column as a %asis for sortin'. To compute cumulative sums in Excel

(teps in the ABC Analysis

We are iven item num%ers& annual demand& and unit price for 15 inventory items. A spreadsheetfor this pro%lem is shown %elow. )n the wor*%oo*& this is (heet 1.

1. Annual usae in + , -annual demandx-unit price. /evelop an Excel formula for the annualusae of )tem 1$1 -cell /5. Copy cell /5 to cells /0 /1".

2. /evelop an Excel formula for Total Annual sae -cell /2$.'. We need to compute the percentae of annual usae for each item. The formula for cell E5 is

,/53+/+2$. Enter the formula& and format the answer as a percentae.!. Copy cell E5 to cells E0#E1".5. (ave your file.0. 4our assinment must include %oth sorted and unsorted versions of your wor*. Copy your

spreadsheet to (heet 2.. )n (heet 2& sort the data %y Annual sae& in descendin order.

(ortin /ata in 6ffice 2$$

-a We want to sort cells A0#E2$. 7ihliht those cells& as shown %elow.

1

7/25/2019 ABC_Analysis_Excel_new2.doc

2/5

-% Clic* the (ort 8 9ilter editin tool in the upper riht hand corner in the tool %ar. (electthe Custom (ort option.

-c This screen should appear.

-d nder the (ort %y Column use the :ercentae value. nder the 6rder Column order fromlarest to smallest.

2

7/25/2019 ABC_Analysis_Excel_new2.doc

3/5

-e (elect 6;. The %ox should disappear& and the data should %e sorted from larest tosmallest percentae.

(ortin /ata in 6ffice 2$$'

-a We want to sort cells A5#E1". 7ihliht those cells& as shown on the next pae.

'

7/25/2019 ABC_Analysis_Excel_new2.doc

4/5

-% 6n the

7/25/2019 ABC_Analysis_Excel_new2.doc

5/5

-d Clic* 6; to sort your data. The sorted data for this pro%lem is shown %elow>

?. Chec* to see that all your data has %een sorted %y annual usae percentae& in descendinorder. Also& chec* at least one item to %e sure that columns A#E match. )f the (ort is notcorrectly& clic* the ndo icon to restore your data to its oriinal order. Then sort aain

". 9or the item with the larest percentae of annual usae& the cumulative percentae is thesame as the percentae. The formula for cell 95 is ,E5.

1$. 9or all other items in the list&cumulative @ , -@ for the current item -cumulative @ for the previous item.The formula for cell 90 is ,E095 . This formula can %e copied to cells 9#91".

11. Classify the items as A& B& or C items.-a The first two items account for 0$@ of annual usae and should %e classified as A items.-% The next four items account for a%out 25@ of annual usae and should %e B items.-c The remainin items should %e classified as C items.

5