ABC analysis is a method for classifying and prioritizing objects or tasks based on their importance or value. It is often used in materials management and warehousing, but can also be used in other areas such as sales or production planning.
Objective of ABC analysis:
Identification of the most important objects (products, customers, suppliers) in order to carry out targeted optimization measures.
Basics of ABC analysis:
Objects are rated according to criteria such as turnover, costs, or order frequency and are divided into three categories:
A-class: Most important objects, small part of the total quantity (approx. 20%) but large share of value (approx. 80%).
B-class: Medium importance, average proportion of quantity and value (approx. 30% of objects and 15% of value).
C-class: Lowest importance, largest quantity (approx. 50%), but low share of value (approx. 5%).
example:
Sort and cumulate products by annual turnover.
Define products that account for 80% of sales as A-class.
Classify the next 15% as B-class and the remaining 5% as C-class.
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