Prioritize high-value products and manage stock with precision.
ABC analysis is an inventory management method that classifies products into A, B, and C categories based on their value to your business.
Built on the Pareto principle, ABC analysis shows that 20% of your items often generate 80% of your inventory value.
A-items are high-value, low-quantity products that require tight stock management and frequent cycle counting.
B-items need moderate control, while C-items are low-value, high-quantity products managed with relaxed inventory rules.
Calculate annual consumption value, rank items by value, group them into A, B, and C, and apply different stock control strategies.
By focusing on high-impact products, businesses reduce carrying costs, improve forecasting, and optimize warehouse operations.