FSN analysis

FSN Analysis aims at classifying items on the basis of their movement from Inventory. Here the items are classified as Fast, Slow and Non moving items taking into consideration both 1) Average stay of the item in Inventory 2) Consumption rate of the item.

FSN analysis
For doing this the preliminary steps are 1) The calculation of the Average Stay and the Consumption rates for all the items/variants involved in the Analysis and 2) The classifications of the items into F,S and N purely on the basis of Average Stay and Consumption rate.
Let there be 10 items under consideration for the FSN Analysis at the location level. For Item code.1, the transactions are shown as below. Here, the total period for which the Analysis is being done is half a month (15 days).

FSN analysis
Step I: Calculation of Average Stay and Consumption rate (for Item1): Opening balance qty = 50nos.
Date 1/1/12 1/2/12 1/3/12 1/4/12 1/5/12 1/6/12 1/7/12 1/8/12 1/9/12 1/10/12 1/11/12 1/12/12 1/13/12 1/14/12 1/15/12 Total Adjustment Receipt Qty. Return Qty. Qty. 10 15 0 0 0 20 0 0 0 10 0 0 0 10 0 65 0 7 0 0 0 0 0 4 0 0 0 0 0 0 0 11 0 0 0 0 5 0 0 0 0 0 0 0 0 3 0 2 Issue Qty. 0 15 0 0 0 0 12 0 0 7 0 12 0 0 0 46 Closing Balance 60 67 67 67 72 92 80 84 84 87 87 75 75 82 82 Inv. Holding days 60 127 194 261 333 425 505 589 673 760 847 922 997 1079 1161 -

FSN analysis
Calculation cont Average Stay for the item = Cum. No. of Inv. Holding days / (Total Rcpt. qty. + Opening Balance) = 1165/115 = 10.09days Consumption Rate = Total Issue qty / Total period duration = 46/15 = 3.06nos/day

FSN analysis
Calculation cont
The Average Stay & Consumption rate calculations are done individually for all the items(in this case 10 items) for which the analysis is being done. Let the Average stay and Consumption rates be as given below:
Item code 1 2 3 4 5 6 7 8 9 10 Average Stay 10.09 7.5 8.23 4.2 6 12 8 9.11 11.2 7.21 Consumption Rate 3.06 5.2 4.71 2 5.1 5.76 3.98 4.48 5.23 4

FSN analysis
Step II: FSN Classification on the basis of Average stay of the items. The items are arranged on the descending order of their Average stays and the Cumulative Average stay calculated. 10% of the Cumulative average stay are categorized as F Class, 20% of the Cumulative average stay for S Class and 70% of the Cumulative average stay for N Class.

FSN analysis
Item code 6 9 1

Average Stay
21.62 18.78 10.09

Cum. Average Stay 12 23.2 33.29

FSN % Average Classificatio Stay n 21.25% 22.81% 39.85% N N N

8
3 7 2 10 5

9.97
9.78 8.02 7.16 6.11 6

42.4
50.63 58.63 66.13 73.34 79.34

50.75%
60.61% 70.18% 79.16% 87.79% 94.97%

N
N S S S F

4.2

83.54

100.00%

FSN analysis
Step III: FSN Classification on the basis of Consumption Rate. After arranging the items in the descending order of their Consumption rate, the Cumulative Consumption rate is calculated. Generally 70% of Cumulative Consumption rate for F Class, 20% Consumption rate for S Class and 10% Consumption rate for N Class.

FSN analysis
Item code Consumption Rate Cum. Consumption Rate % FSN Consumption Classification Rate

6
9 2 5 3

5.76
5.23 5.2 5.1 4.71

5.76
10.99 16.19 21.29 26

13.24
25.25 37.2 48.92 59.74

F
F F F F

8
10 7 1 4

4.48
4 3.98 3.06 2

30.48
34.48 38.46 41.52 43.52

70
79.23 88.37 95.4 100

F
S S N N

FSN analysis
Step IV: Final Classification of items into F,S and N Classes. For each of the items for which Average stay and Consumption rate were calculated and FSN classification done individually on the basis of both the Average stay and the Consumption rate, the final FSN classification is done on the basis of the matrix as shown below:

FSN analysis
FSN (Consumption FSN (Average Stay) Rate) Final FSN Classification

F
F F S S S N N N

F
S N F S N F S N

F
F S S S N S N N