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What is Pareto Rule as applied to Material Classification?

Select one:a. % workers deliver% productsb.% workers deliver% productsc.% of items constitute% of Value and% of items constitute% of valued.% of effort delivers% output and% effort results in% of output

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Question added by Wasi Rahman Sheikh , WAREHOUSE SUPERVISOR , AL MUTLAQ FURNITURE MFG
Date Posted: 2016/04/29
Saiyid Maududi-Oracle Applications Consultant
by Saiyid Maududi-Oracle Applications Consultant , Entrerprise Architect , US Technomatrix, Inc

Hello Team,

When it comes to classifying your inventory it is usually safe to follow the Pareto Principle, also known as the 80/20 rule. The Pareto Principle is the theory that most businesses see 80% of their sales come from roughly 20% of customers, which should fall into your A classification category.

Regards,

 

Saiyid

Sathish Prabhu.V
by Sathish Prabhu.V , Manager - Operations & Process Improvement , Revolution Valves

Since it is material classification, ABC analysis principle which is similar to Pareto principle should be applied, i.e., 

‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.

‘B’ items - 30% of the items accounts for 25% of the annual consumption value of the items.

‘C’ items - 50% of the items accounts for 5% of the annual consumption value of the items.

 

Hence c.% of items constitute% of Value and% of items constitute% of value is the right answer

Michael Owen
by Michael Owen , grounds maintenance , private

The rule works on the basis of 80% to 20% for example. 80 % OF YOUR. Business comes from 20% of your customer base

MADAN MOHAN GAJULA
by MADAN MOHAN GAJULA , Material Coordinator , Sadara Chemical Company

a. % workers deliver% products

20% of items constitute 80% of Value and 80% of items constitute 20% of value.

Nadeem Asghar
by Nadeem Asghar , Supply Chain Consultant/Trainer , Independent Practitioner

Agree with the reply given by  Saiyid Maududi

Ahmed Mohamed Ayesh Sarkhi
by Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

agree with all expert answers above

 

Answer is the option a)=======================

Agree with all champion __________________

Eng Ahmed Elsharkawy
by Eng Ahmed Elsharkawy , Civil Engineering Project Manager , Altwijry office

thanks for invition ,,,,,,,,,,

my choice is option A 

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