Build the ABC list

Rank three spare parts by annual usage value: belt at $9 used 2,400/year; gearbox kit at $1,200 used 1/year; sensor at $85 used 90/year. Annual usage value = annual demand x unit cost The common trap is ranking by unit price and missing cheap parts that quietly consume value. Belt value 2,400 belts x $9 = $21,600 annual usage value. High movement can make a low-price part financially important. Gearbox kit value 1 kit x $1,200 = $1,200 annual usage value. The kit may still be critical, but ABC value ranking alone does not put it above the belt. Sensor…

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