Tools

ABC Analysis

Quickest way to perform ABC Inventory Analysis - Based on Value, Volume and Frequency of Sales

ABC inventory analysis is a process of classifying the products based on the value of importance. This concept is derived from the Pareto principle of 80/20 rule which focuses on vital few from trivial many. Not all items in an inventory are of the same value, therefore these items are broken down into three categories A, B and C. Class A consists of most valuable items, although these items constitute only 10% of quantity they account for 70% – 80% of consumption value. Class B consists of items with moderate importance accounting for 10% – 20% of revenue. And class C consists of least valuable items that contribute to only 10% of revenue. This classification helps managers in prioritizing and monitoring items of high importance closely.

Please refer to Quickest Way to Perform ABC Inventory Analysis- Based on Value, Volume & Frequency of Sales, and use the Free Tool mentioned in this performance to conduct ABC Inventory Analysis very quickly.

To learn Inventory Management in a lot more details, please refer to The Ultimate Guide to Inventory Planning Methods

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