Description
Candidates will be provided with an Excel spreadsheet that includes data from a small Canadian company’s annual spend. There are two components to this exercise.
- Spend Analysis
- Based on the data provided, find all of the opportunities to re-name categories for a
simplified spend analysis.
- Identify where and how money may be saved for the next year.
- Sort the categories by highest to lowest dollar spend.
- Pareto Analysis
- Based on the data provided, do a pareto analysis using standard ABC categories to
classify the suppliers.
Wilfredo Pareto (1848-1923) studied sociology, engineering, economics and philosophy, among other disciplines. He discovered that 80% of the land in Italy was owned by 20% of the population. It was Joseph Juran, a business consultant, who named the 80/20 rule after Pareto – the Pareto principle. This same distribution has been accurately applied to multiple areas: 80% of your sales come from 20% of your customers, etc.
For the purpose of this exercise, please use 3 categories for the Pareto analysis
A = 80%; B=15%; C=5%
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