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- Rawat, K. (2015). Today’s inventory management systems: A tool in achieving best practices in Indian business.
Anusandhanika, 7(1), 128-135.
- Chen, J., Dada, M., & Hu, Q. (2016). Designing supply contracts: buy-now, reserve, and wait-and-see. IIE Transactions, 48(10),
- Olsson, F. (2014). Analysis of inventory policies for perishable items with fixed leadtimes and lifetimes. Annals
of Operations Research, 217(1), 399-423. doi: 10.1007/s10479-014-1590-x
- APICS, the association for operations management
- Institute of Industrial Engineers website
- Inventory Management website
Management textbook companion website for the 11th and 12th editions
Please respond to the 2 separate discussion post below in at least 150 words
Analysis is the process of classifying inventory based on the value of
items. ABC Analysis is a concept that comes from the Pareto Principle of
80/20. The Pareto Principle says that there is a vital few items in a
group of many that make up about 80% of an organizations value. ABC
Analysis highlights the fact that not all inventory is valued the same.
Inventory is separated into groups of A,B, or C, with items in the “A”
category given the highest value though this category will contain only
about ten percent of inventory it represents the largest portion of
value. The “B” class is of moderate value with around a quarter of an
organizations value. The “C” category represents the rest of inventory
and the least valuable bit.
A form of this inventory management system is actually utilized by
the United States Navy. For instance the Navy is made up of ten Aircraft
Carriers and about 75 Nuclear Submarines, this is only a small chunk of
the approximately 500 warships in the Navy’s register; however these
represent the largest amount of value to the navy from a defense
standpoint (the “A” category) as they are the most expensive to maintain
and the most crucial to the nation’s interests, the navy intern gives
these platforms with the highest priority with regard to refit and
repairs. These ships and boats (submarines are referred to as boats by
submariners) also make up the current Nuclear Navy which the navy places
the most value upon. These may not be exactly 80% of the total value
but it is certainly the most significant. The “B” category is made up
mostly by the remaining amphibious troop carriers, cruisers, cruisers,
and other platforms as these make up the largest chunk of the navy but
are relatively inexpensive and slightly more expendable then those in
group “A” (to be clear I do not find any lives expendable. I am merely
speaking from an expense and equipment standpoint). Group “C”;
aircraft, also makes up a large portion of the Navy physically, however
Aircraft individually are typically much less expensive and one
individual jet or cargo plane is far less valuable than an entire
warship to the navy. Of course, the navy has an extremely intricate
supply system and individual parts are vastly more broken down into
categories but as a whole, the Navy uses this system to prioritize the
warships it has currently commissioned.
I have really enjoyed everyone’s posts during this class, good luck everyone!
M. (2016, May 10). A Complete Guide to ABC Analysis in Customer
Segmentation and Inventory. Retrieved September 30, 2019, from
P. (2016, July 18). 6 Benefits to Adapting ABC Analysis of Inventory in
your company. Retrieved September 30, 2019, from
Rusanescu, M. (2014). ABC Analysis, Model for Classifying Inventory. Hidraulica,
(2), 17–17. Retrieved from
Naval Supply Systems Command (NAVSUP) Integrated Weapons System Support
Team is the logistics organization responsible for the spare parts
support for all weapon systems for the Navy, Marine Corps, Joint, and
Allied Forces (Luster, 2019). In order to meet the unique needs of
their customers, the team developed a new inventory categorization
technique. The technique, called WSS4, is based on an ABC analysis
model and adapted to the demands and circumstances causing reliability
issues within the weapons system supply chain (May, Atkinson, and
The team used the ABC analysis model to identify the most critical
items to the system. The criteria established to determine the A, or
most critical, items was based on demand, casualty reports or emergency
requisitions for critical parts, and platform readiness drivers or
problematic parts due to their impact on the mission or supply chain
reliability (May et al, 2017). B and C items were tiered down from
there. This allows the team to focus resources on A items as prescribed
by their technique and by the ABC analysis policies, which also
prescribes applying a higher level of inventory control, security, and
forecasting on A items (Heizer et al, 2017).
These items were chosen, rather than focusing strictly on annual
dollar volumes, because of the criticality of their impact to the
mission and to the supply chain. This is a combination ABC analysis
with the concept of critical success factors, which is defined as “few
factors that are critical for the success of a company and they must
receive careful and constant attention from managers” (Mohamed Syazwan,
Abu Bakar, and Ai, 2015, para. 1).
Heizer, J., Render, B., & Munson, C. (2017). Operations management: Sustainability and supply chain management (12th ed.). Boston: Pearson.
Luster, K. (2019, May 7). NAVSUP Weapon Systems Support Ensures
Warfighter Readiness Through End-to-End Supply Chain Management.
May, B., Atkinson, M., & Ferrer, G. (2017). Applying inventory classification to a large inventory management system. Journal of Operations and Supply Chain Management, 10(1), 68–86. https://doi.org/10.12660/joscmv10n1p68-86.
Mohamed Syazwan, A. T., Abu Bakar, A. H., & Ai, C. T. (2015).
Critical success factors of supply chain management: A literature survey
and pareto analysis. EuroMed Journal of Business, 10(2), 234-263. doi:http://dx.doi.org.csuglobal.idm.oclc.org/10.1108/E…