ABC analysis: focus on the inventory that matters most
How to split stock into A, B and C items by value so you spend your time and cash where it counts.
Updated 15 October 2026
The idea
A small share of items usually makes up most of your inventory value. ABC analysis ranks items by yearly usage value so you can manage them differently.
How to do it
Multiply each item's yearly usage by its unit cost. Sort from highest to lowest. Roughly the top 70–80% of value are A items, the next 15–25% B, and the rest C.
What to do with each group
A items: count often, tight reorder points, higher service levels. B items: regular reviews. C items: simple rules and bulk ordering.
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