ABC analysis
01.06.2011 22:07

ABC analysis

1) A form of Pareto analysis applied to a group of products for selective inventory management controls. The inventory value for each item is obtained by multiplying the annual demand by unit cost and the entire inventory is then ranked in descending order of cost. However, the classification parameter can be varied; for example, it is possible to use the velocity of turnover rather than annual demand value.

Source: David Lowe. The Dictionary of Transport and Logistics. Kogan Page, 2002. – P.1 (288 p.)


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