The application methods of ABC/XYZ-analysis for the inventory management purposes within the ERP-system

Abstract

Inventory management for a trading company is a vital task, which requires processing significant amounts of information. Through the application of ABC/XYZ-analysis of the nomenclature within the enterprise ERP-system, it is possible to increase significantly the efficiency of inventory management, in accordance with Pareto principle concentrating on managing the most important categories of goods. Various researchers dealt with the methods of ABC/XYZ-analysis itself but its usage as a part of the inventory management and procurement subsystem has a number of essential features, ignoring of which can lead to tangible negative consequences. The article discusses the methods and key problems of application of ABC/XYZ-analysis within the enterprise management accounting information system. For each of the factors that can affect the reliability of sales and procurement statistics and distort the results of the classification of goods, we have formulated the proposals to minimize the negative impact of that specific factor. Proposed methods allow reducing the impact of the following factors: availability of conditions for duplicate nomenclature to appear within the enterprise accounting software, the lack of a unified approach to the formation of names for newly created items of nomenclature, frequent changes in the products range of the suppliers, excessive detailing of information about a product in its name. The results of successfully implemented analysis and classification of goods can be used for a wide range of tasks varying from implementing effective inventory control to general planning and forecasting commodity flows as a part of the enterprise budgeting model. Solving these problems will harmoniously fit the inventory management in the managerial accounting system making it an effective tool in achieving strategic business goals.