ABC Inventory Analysis is an inventory management method that classifies products and materials into three categories based on their annual consumption value and financial importance. A items typically represent around 80% of total consumption value and require close monitoring, B items account for approximately 15% and need regular control, while C items make up the remaining 5% and can often be managed with simpler procedures.
ABC analysis helps businesses prioritize high-value inventory, optimize purchasing, reduce excess stock, and improve cash flow. When integrated with an ERP system, it supports smarter replenishment decisions, better inventory visibility, and more efficient warehouse and manufacturing operations.
