What is ABC analysis?

ABC analysis is a method used in inventory management to categorize items based on their relative importance and value to the business. It aims to prioritize items and allocate resources efficiently by classifying them into three categories: A, B, and C. Category A includes high-value items that contribute significantly to the revenue or profits of the organization. Category B consists of medium-value items that have a moderate impact on the business. Category C comprises low-value items that have minimal monetary impact but still require inventory management. This analysis allows businesses to focus their attention on the most critical items, optimize inventory levels, reduce costs, and enhance overall operational efficiency.

This mind map was published on 16 January 2024 and has been viewed 53 times.