Limitations of abc analysis, Managerial Accounting

LIMITATIONS OF ABC ANALYSIS

However ABC analysis is a basic tool for exercising selective control over many inventory items, it does not, in its current form, allow precise consideration of all relevant troubles of inventory management. For illustration, a never-ending trouble in inventory management is that of sufficiently handling thousands of low-value `C' items. Low-value purchases often require more items and thereby decrease the time allowance accessible to purchasing personnel for value analysis, vendor investigation, and other `B' items.

Moreover, if ABC analysis is not periodically evaluated and updated, the very approach of control might be defeated. For illustration,`C' items similar to diesel oil in a firm, will become most high-value items throughout power crisis should, hence, deserve more attention, though this point might be overlooked when classification of items is not evaluated and updated.

Posted Date: 12/6/2012 6:50:19 AM | Location : United States







Related Discussions:- Limitations of abc analysis, Assignment Help, Ask Question on Limitations of abc analysis, Get Answer, Expert's Help, Limitations of abc analysis Discussions

Write discussion on Limitations of abc analysis
Your posts are moderated
Related Questions
Inappropriate standards (or targets): This is a problem arising from deficiencies in planning. If not enough time and resources are devoted to setting accurate standards in th

Funds produced from operations, throughout an accounting period, raise working capital by an equivalent amount. The two major components of funds generated from operations are depr

1. In order to boost the housing market throughout 2009 and into 2010, the federal government offered a tax credit to first-time home buyers and some repeat buyers.


Illustration of Graphic Analysis The four steps of cost-volume-profit analysis can be employed to graph and study any cost-volume relationship. Suppose that you have been aske

THE GAMES ECONOMISTS PLAY It sounds like a sports fan's dream.  In Stockholm on October 11th, three men share a $1m prize for their skill at analyzing games. They are not telev

#question1-50..

What are the Advantages of budgetary control This budgetary control system helps in fixing the goals for the organization as a whole and concerts efforts are made for its achie

After going through this section, you must be capable to: Know the concept and characteristics of working capital; Identify with the difference among net working capital

What is Master budget Financial budget are concerned with cash receipts and disbursements working capital. Several functional budgets are integrated into master budget. This bu