What is ABC analysis conceptually?

< 1 min read

ABC analysis is a categorization technique that groups items based on their importance or contribution to overall value.
In one project, we classified products into A, B, and C categories based on revenue contribution.
Category A represented high-value items contributing the majority of revenue.
Category B included moderate contributors.
Category C consisted of low-value, long-tail items.
It is commonly aligned with the Pareto principle (80/20 rule).
ABC analysis helps prioritize inventory management and business focus.
Overall, it supports resource optimization by concentrating on high-impact segments.

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