WareMatch Glossary
ABC Analysis
An inventory classification system that categorizes items based on value and demand.
A
Updated 2025-10-01
Definition
ABC Analysis divides inventory into A, B, and C categories: 'A' items are high-value with low frequency, 'B' are moderate, and 'C' are low-value but high in quantity. It helps prioritize management efforts.
Overview
Overview of ABC Analysis
ABC Analysis is widely used in warehouse management and supply chain strategy.
- A items: High value, low quantity (e.g., expensive machinery parts)
- B items: Moderate value and frequency
- C items: Low value, high frequency (e.g., packaging supplies)
Benefits
- Better inventory control
- Improved purchasing decisions
- Cost optimization
Example
A warehouse might use ABC Analysis to focus cycle counting on 'A' items while checking 'C' items less frequently.
Tags
#ABC#Inventory Control#Classification#Optimization
Related Terms
80/20 inventory rule
Cycle Counting
Inventory turnover
