ABC Analysis
Classify inventory items by value contribution, review the Pareto curve, and decide where tighter stock control will have the greatest impact.
1. Data Import
Drag & drop your Excel (.xlsx, .xls) or CSV here
Or click to browse files from your computer
Map Your Columns
2. Quick Manual Entry
| Item Name / SKU | Value | Delete |
|---|
3. Parameters & Settings
Total Evaluated Value
$0.00
Class A Count / Value %
0 (0%)
Class B Count / Value %
0 (0%)
Class C Count / Value %
0 (0%)
Pareto Principle Visualization (ABC Curve)
Classification Analytics Output Table
| Rank | Item/SKU Identifier | Calculated Value ($) | Individual % Share | Cumulative % | ABC Class |
|---|
About ABC Analysis
ABC analysis ranks inventory by contribution to total value, helping separate the highest-impact items from lower-impact stock. Class A usually contains the few items that drive most value, Class B covers the middle band, and Class C captures the remaining long tail.
How the calculation is done
- The tool calculates each item's value using either the direct value column or Quantity x Unit Price.
- Items are sorted from highest value to lowest value.
- Each item receives an individual percentage share of the total value.
- A running cumulative percentage is calculated across the sorted list.
- Items are classified as A, B, or C based on the cumulative thresholds selected in Settings.
High-value items that usually need tighter control and frequent review.
Moderate-value items that benefit from routine monitoring.
Lower-value items where simpler controls often make sense.
Practical Guidance
What to Do With Each ABC Class
Review these items often, keep stock control tight, and watch stockout risk closely. Use detailed forecasting, focus supplier conversations on reliability, and tune reorder points so important items stay available without tying up excess inventory.
Manage these with standard reorder points, planned replenishment, and periodic review. They need steady attention, but usually do not require the same level of control as high-priority A items.
Keep controls simple with min/max rules, less frequent counts, and bulk ordering where it is practical. The goal is to reduce handling effort while still keeping enough stock for normal demand.
When to Use This Tool
Prioritise SKUs for cycle counts, stock reviews, and demand planning so effort is focused where inventory value is highest.
Use the results to support slotting choices and keep important items in pick locations that are easier and faster to access.
Apply different reorder policies by class and direct supplier conversations toward the SKUs that have the greatest value impact.
Find items that may need tighter control, simpler replenishment, vendor-managed inventory, or consignment stock arrangements.
Who Can Use This Tool?
Use ABC analysis to identify the products that deserve the closest attention, especially when managing many SKUs across stores, marketplaces, or fulfilment channels.
It helps teams focus replenishment, availability checks, and margin protection on items that have the strongest impact on inventory value.
- Plan cycle counts around the items that matter most.
- Support slotting decisions for faster picking and better control.
- Review high-value stock more often without overchecking every SKU.
Apply different reorder policies by class, then use the results to guide supplier reviews, lead-time discussions, and service-level decisions.
- Understand where inventory value is concentrated.
- Target working-capital improvements without treating all stock equally.
- Connect operational controls with cost and cash-flow priorities.
Why ABC Analysis Matters
It separates high-impact items from routine stock, making control effort easier to target.
Priority items can receive more detailed demand review, helping reduce avoidable surprises.
Teams can spend time, analysis, and management attention where the return is strongest.
Clearer priorities help avoid overstocking low-impact items while protecting important ones.
Count frequency can be matched to item importance instead of using one schedule for all SKUs.
Classification changes can highlight items that are growing, declining, or becoming obsolete.
Simple, class-based policies reduce unnecessary checks and make inventory routines easier to run.
Methodology, Assumptions, and Limitations
Item value is either the supplied value field or Quantity x Unit Price. Individual share is item value divided by total value. Cumulative share is calculated after sorting items from highest value to lowest value.
The method assumes value contribution is the right prioritisation measure. It does not automatically account for criticality, lead time, substitution risk, shelf life, or customer impact.
ABC classes are a decision aid, not a final policy. Review high-risk or operationally critical items separately, even when their calculated value class is B or C.
FAQ
How often should I run ABC analysis?
Run it monthly or quarterly for active inventory. Fast-moving or seasonal businesses may benefit from running it more often.
Can an item change classification over time?
Yes. Demand, price, supply risk, and lifecycle stage can all move an item between A, B, and C classes.
How does ABC analysis affect cycle counting?
A items are usually counted more often, B items on a regular schedule, and C items less frequently with simpler checks.
What are the thresholds for A, B, and C?
A common starting point is A up to 80% of cumulative value and B up to 95%, with C covering the rest. Adjust these thresholds to fit your business.
Can ABC analysis be used outside physical inventory?
Yes. The same ranking approach can help prioritise customers, suppliers, service parts, support tickets, or any list with measurable value.