The ABC Classification of Products or Services - Paper Example

Some of the tasks of a technician in a hospital setting include preparation and distribution of prescription medicine, filling orders of patients, delivery of orders of patients, maintaining stock records, compounding as well as clerical work. As for nurse, some of the roles and duties that they may be called upon to do include administering medications, supporting patients emotionally and occasionally, they may resolve some queries. Nurses, may also be called upon to write and maintain records, document services, ensure smooth flow of communication with doctors, giving directions in some instances as well as supervising. They may also establish treatment plans, monitor and administer medical items as well as supervisor and tutor student nurses. Nurses may also administer pre and post operation care and in other circumstances they may take the mantle of treating medical emergencies. Occasionally, they observe and record the progress of patients and may also perform diagnostic tests. To operate the three machines, nurses and technicians may take differentiated roles at different intervals. In this case, the technicians and the nurses may each operate the machines in turns. This can be as follows.

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What is the ABC classification of products or services?

Classification of products and services using ABC method encompasses a variety of myriad objects such as finished materials as well as the idle stock in the business premise. classification process involves analyzing a range of objects such as finished products as well as those that could be lying in inventory. Ideally, ABC classification method involves use of three levels of labelling and organizing products and services. Just like Pareto analysis, ABC system adopts techniques useful in organizing data into the most useful, moderate useful and the non-useful products and services. The ABC ABC Iis a method computes the overhead and of allocating overhead and direct expenses incurred in order of the items with the highest valueto most the vital activities of the company first. The process helps business people to generate more profit in com. ABC classification is utilized in categorizing materials or items. The system avails a system for pointing out items which have significant impact on the overall cost of products and services. In addition to this, the ABC system ,avails a platform used to it renders a platform for identifying y various categories of inventory which require different policy settings and inventory control. When classifying inventory, the Pareto principal comes into play. The Pareto principal is also known as the 80/20 rule. The theory puts across the thought that many enterprises see 80% of their sales come from roughly 20% of customers. Each category can be handled in a differentiated manner with more attention being devoted to category A, less to B and still lesser to C. Populary known is the 80/20 rule. Special consideration ought to be taken for new and critical items in the inventory level. As a matter of fact, the ABC concept is derived from the Paretos 80/20 rule. Incase the products are quite new, it is usually an option to use yearly demand forecasting estimates to support demand estimates. For critical inventory items, there is need to conduct special monitoring to avoid exhaustion of vital stock. Many corporations utilize the ABC systems to support replenishment inventory. When applied in the concept of inventory, its a determination of the relative ratios between the number of items and the currency value of products and services purchased or consumed on a regular basis. ABC concept is applied to inventory management as a rule of thumb. According to the rule, it posits that about 80% of the rupee value, consumption wise, of an inventory remains in about 20% of the items. This rule generally applies to managers prompting them to devote all their efforts to projects with the greatest benefits, interms of cost reduction as well as maintaining a smooth availability of stock. High value (A), low value (C), intermediary value (B)20% of the items account for 80% of total inventory consumption value Specific items on which efforts can be concentrated profitablyThe ABC analysis is conducted on different stocked items which are not all equal in value or order frequency. The three categories of classification of products and services include: Essentially, here is a brief overview of how ABC organizes products according to their significance: it is a system of categorizing the projects with similarities to Pareto analysis. ABC method classifies inventory into three classes with each class having a different management control associated:A Outstanding importantExtremely important products and services10-20% of the items (A class) account for 70-80% of the consumption. A classification The A The category of goods and servicesies takes into account the most vital items to an in of an organization. As a result of the sDue to a surge in the demand level of products and servicescommodities, a constant value analysis is usually carried out to these products. This category of goods and services puts more emphasis on fast moving values which are of great importance and indispensable for use in the production s required. Ideally, this categories emphases fast moving value items which process. account for significant percentage of the targeted service levels as well as customer satisfaction rates.B inventory classificationIdeally, this category of products is known as moderate essential products and services. Essentially, this is the second category of inventory management controls. The next 15-25% (B class) account for 10-20% of the consumption. It takes into account the This category takes into account importvalue of important ant items of middle range inventory but which are of less significance as compared to the A items and more important that the C categorical items. They basically are middle range inventory value and order frequency.C classificationIdeally, this is the last cateThis category which takes into account of the inventory items which are of minimal or marginal value. I The balance 65-75% (C class) account for 5-10% of the consumption. A class items are monitored closely as a result of their value (70-80%). It is the category that represents non-essential products and services in terms of control. Such products and services are associated with slow moving and low frequency commodities. Pentails only the items that are of marginal value. Ideally, significant low order frequency and high inventory value. The products and services falling under this category are those which are usually stocked with very low quantities and not all due to the high carrying cost accruing from the stock levels.B Moderate essential products and servicesof average importanceC Non essential products and services Relatively unimportant as a basis of control.in terms of control. ABC Iis a method of allocating overhead and direct expenses incurred to most the vital activities of the company first. The process helps business people to generate more profit in comABC classification is utilized in categorizing materials or items. The system avails a system for pointing out items which have significant impact on the overall cost of products and services. In addition to this, it renders a platform for identifying various categories of inventory which require different policy settings and inventory control. The ABC analysis is conducted on different stocked items which are not all equal in value or order frequency. The three categories of classification of products and services include:A classification The categories takes into account the most vital items in of an organization. Due to a surge in the demand level of products and services, constant value analysis is required. Ideally, this categories emphases fast moving value items which account for significant percentage of the targeted service levels as well as customer satisfaction rates.B inventory classificationThis category takes into account important items but which are of less significance as compared to the A items and more important that the C categorical items. They basically are middle range inventory value and order frequency.C classificationThis category entails only the items that are of marginal value. Ideally, significant low order frequency and high inventory value. The products and services falling under this category are those which are usually stocked with very low quantities and not all due to the high carrying cost accruing from the stock levels.The level of control reflects cost benefit concern.When classifying inventory, the Pareto principal comes into play. The pareto principal is also known as the 80/20 rule. The theory puts across the thought that many enterprises see 80% of their sales come from roughly 20% of customers.Special consideration ought to be taken for new and critical items in the inventory level. Incase the products are quite new, it is usually an option to use yearly demand forecasting estimates to support demand estimates. For critical inventory items, there is need to conduct special monitoring to avoid exhaustion of vital stock. Many corporations utilize the ABC systems to support replenishment inventory. Each category can be handled in a differentiated manner with more attention being devoted to category A, less to B and still lesser to C. Populary known is the 80/20 rule. ABC concept is applied to inventory management as a rule of thumb. According to the rule, it posits that about 80% of the rupee value, consumption wise, of an inventory remains in about 20% of the items. This rule generally applies to managers prompting them to devote all their efforts to projects with the greatest benefits, interms of cost reduction as well as maintaining a smooth availability of stock. The ABC concept is derived from the Paretos 80/20 rule. When applied in the concept of inventory, its a determination of the relative ratios between the number of items and the currency value of products and services purchased or consumed on a regular basis. 10-20% of the items (A class) account for 70-80% of the consumptionThe next 15-25% (B class) account for 10-20% of the consumption and The balance 65-75% (C class) account for 5-10% of the consumptionA class items are monitored closely as a result of their value (70-80%)High value (A), low value (C), intermediary value (B)20% of the items account for 80% of total inventory consumption value Specific items on which efforts can be concentrated profitably

How can this classification scheme be used to design service delivery systems?

ABC enables the maintaininmaintaining of inventory and assign priorities for inventory control. For items falling under the category of A or B items, strict control and measures are put in place to ensure that there are low safety stock level. Items falling under the C category can be maintained with looser control. The main idea behind the ABC system is to accord every item in the inventory a significan...