ABC analysis is an inventory categorisation method used within the Supply Chain industry.

Items may include customers, documents, inventory or activities, and are then grouped into three categories (A, B, & C) in order of their estimated importance. ‘A’ items are very important, ‘B’ items are important, ‘C’ items are marginally important.

For example, the best customers who yield highest revenue are given the ‘A’ rating, are usually serviced by the sales manager, and receive most attention. ‘B’ and ‘C’ customers warrant progressively less attention and are serviced accordingly.

 

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