HML ANALYSIS
H-M-L analysis is similar to ABC analysis except the difference that instead of “Annual Inventory Turnover”, cost per unit criterion is used .
The items under this analysis are classified based on their unit prices . They are categorized in three groups , which are as follows
H-High Price Items
M-Medium Price Items
L-Low Price Items
Objectives of hml analysis
Determine the frequency of stock verification
To keep control over the consumption at the department level
To evolve buying policy, to control purchase
To delegate the authority to different buyer
Determine the frequency of stock verification
To keep control over the consumption at the department level
To evolve buying policy, to control purchase
To delegate the authority to different buyer
XYZ ANALYSIS
XYZ analysis has a correlation with ABC analysis, only the difference is that instead of annual consumption and price per unit , the inventory value is considered. Usually XYZ analysis is used in conjunction with either ABC analysis or HML analysis.
XYZ analysis is based on value of stock on hand (i.e- inventory investment ). Items whose inventory values are high are called X items , while those whose inventory values are low are called Z items and Y items are those which have moderate inventory stock . This can also be shown as below :-
X- high inventory value
Y-moderate inventory value
Z -low inventory value
H-M-L analysis is similar to ABC analysis except the difference that instead of “Annual Inventory Turnover”, cost per unit criterion is used .
The items under this analysis are classified based on their unit prices . They are categorized in three groups , which are as follows
H-High Price Items
M-Medium Price Items
L-Low Price Items
Objectives of hml analysis
Determine the frequency of stock verification
To keep control over the consumption at the department level
To evolve buying policy, to control purchase
To delegate the authority to different buyer
Determine the frequency of stock verification
To keep control over the consumption at the department level
To evolve buying policy, to control purchase
To delegate the authority to different buyer
XYZ ANALYSIS
XYZ analysis has a correlation with ABC analysis, only the difference is that instead of annual consumption and price per unit , the inventory value is considered. Usually XYZ analysis is used in conjunction with either ABC analysis or HML analysis.
XYZ analysis is based on value of stock on hand (i.e- inventory investment ). Items whose inventory values are high are called X items , while those whose inventory values are low are called Z items and Y items are those which have moderate inventory stock . This can also be shown as below :-
X- high inventory value
Y-moderate inventory value
Z -low inventory value