Definition: is an analysis method that allows separating a specific subject into three groups (A, B, and C) depending on their importance to the company’s interests and required approach. It is a type of Pareto analysis and can be used to sort operations, clients, documentation, inventory items, etc. Traditionally, items allocated to the “A” category are marked as “the most important,” items belonging to the “B” category are qualified as “significant,” and the rest is considered to be “marginally important.”
In a Sentence:
Our company has incorporated the ABC analysis method to segment our clients and break down customer-related information.
ABC analysis has proven to be a terrific tool for inventory control, making it easier to figure out which inventory items have the largest impact on the overall costs.
David Spencer has utilized ABC analysis to divide the firm’s products into the “most valuable,” “significant,” and “marginally valuable” to see which devices bring the most money.
Synonyms and related words: fundamental analysis, sales territory, technical analysis, materials management, inventory categorization