ABC analysis

ABC analysis is used in Materials Management to valuate and classify stock items.

A-items have a high value and low consumption at the same time. All articles with a B classification have an average value and also an average consumption. C-articles have a low value share, but at the same time a high quantity consumption.

Since a descending meaning can be assigned to the products in this way, ABC analysis is often also called program structure analysis. In this way, the company can identify the products that contribute most to turnover. On the basis of the ABC analysis, the company can determine how the production capacities are to be distributed among the three classes. It certainly makes sense to focus on class A.