06ABC analysis: Shipment and inventory do not match
The rank classifications for shipping ABC analysis and inventory ABC analysis don't match.
If you aggregate what you think is an appropriate week's shipping and inventory data, take the average, and perform ABC analysis, have you noticed that the item composition of the shipping rank classification and inventory rank classification don't match at all?
For example, if product A has a shipping rank of A1 but an inventory rank of C. This happens when product A arrives and only "safety stock" remains in stock. This situation is more common with higher ranks.
This means that accurate rank classification is not possible unless inventory data spanning the entire receiving cycle (maximum inventory days - safety stock days) is considered.
Another problem is that inventory data spanning the entire receiving cycle reflects past shipping trends.
It's difficult to decide which rank to use.
What can be said is that you certainly shouldn't analyze inventory data from the end of the month, when there are many high-ranked shipping items.
Tera calculations use the rank of the shipping data. The reason for this is explained on another page.
Distribution centers exist for shipping. Remember that this is inventory for shipping and arrival to ensure stock is available.