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2.3 Hybrid
Most cycle counting frequencies are determined rst by
Pareto frequency analysis, and then changing the count
frequency, or ABC code, as needed per item is based on
per piece value, how critical the part may be, or other
factors. This method requires manual arrangement and
is not statistically pure since arbitrary adjustments can be
made.
ABC analysis
Most cycle counting applications use ABC analysis, segregating items into various count frequencies.
2.1
3 Automation
Pareto method
To conduct ecient and accurate cycle counts, many organizations use some form of software to implement an
inventory control system, which is part of a warehouse
management system. These systems may include mobile
computers with integrated barcode scanners that allow
the operator to automatically identify items, and enter inventory counts via keypad. The software then transmits
data to a database on a host system which can generate inventory reports. Based on user dened criteria, the software will select a number of items to count at specic
locations for the specied period of time. Ideally, these
selections are daily but many companies choose to generate cycle count items weekly. Many companies perform
mini physical inventories and call it cycle counts. Instead of using random or system generated part numbers
at specic locations to count, they selectively choose specic locations and count everything in those locations. As
part of their procedures they rotate throughout the plant
with the intention of counting every location a minimum
of once each year. This is an eective alternative to true
cycle counting where a company may not have the sophistication to utilize cycle counting software.
Risks
References
REFERENCES
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