Discount Brand Factory Case Study

ABC Analysis for finding maximum profit generating categories – Discount Brand Factory’s Case Study

Abhishek Yawalkar
1st author's affiliation
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2nd line of address [e-mail] Aakash Jangir
2nd author's affiliation
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2nd line of address [e-mail] 3rd Author
3rd author's affiliation
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ABSTRACT
Identifying the maximum profit generating products is a very essential step for a company to survive in this world full of competition. The objective of this study is to categorize different categories of products on the basis of profit generated by them for the company. The method used here for categorizing the products is ABC segmentation which will divide the products into three different categories namely A, B and C. 1 year data is collected from the POS system of Discount Brand Factory.

Keywords
ABC segmentation, Profit margin, POS, Inventory management, pruning, Holding Cost, Congestion factor, Channel profit
1. INTRODUCTION
It is very important to understand which categories are more important. The ultimate goal of a company is profit maximization and cost reduction. A company always plans to implement some methodologies to save money and increase their profit. One of the most efficient way of maximizing the profit is segmentation of products by ABC analysis. ABC segmentation is done on the basis of different criteria. The criteria can be based on annual consumption, cost, profit, demand, etc. This research consists of the ABC segmentation based on profit margin of different categories. In this scenario the profit can be increased by reducing the holding cost per item at store by analyzing the materials that generate least profit and hold space at