← Back to glossary Category: Operațional · Acronym: ABC ABC Analysis Quick answer: Classifying products into three classes (A, B, C) by their contribution to value or revenue, to prioritise management. Key takeawaysCounting frequency (A often, C rarely)Warehouse placement (A near the picking zone)Safety stock level per class What ABC analysis is ABC analysis applies the Pareto principle to inventory: class A (~20% of SKUs) drives ~80% of value, class B the medium contribution, class C (~50% of SKUs) only ~5% of value. Why it matters It lets you focus attention and capital where they count: tight control of A items, relaxed policies for C. Foundation for slotting, cycle counting and differentiated replenishment policies. Applications Counting frequency (A often, C rarely) Warehouse placement (A near the picking zone) Safety stock level per class How Azuvio helps Azuvio recalculates ABC classification automatically from real sales and applies it to slotting, cycle counting and replenishment proposals, with no manual ERP work. Frequently askedIs ABC analysis done by value or quantity?Most often by throughput value (quantity × price), but it can also be done by volume, order frequency or margin, depending on the goal.What is ABC-XYZ analysis?It combines ABC (value) with XYZ (demand variability), giving a 3×3 matrix for much finer stock policies. Where Azuvio fitsSoftware WMSSoftware OMSConectori ERP Related termsXYZ Analysis — Classifying products by demand variability (predictability): X = stable, Y = variable, Z = erratic.Inventory turnover — How many times stock is fully sold and replenished in a period — a measure of capital efficiency.Dead stock — Goods unsold for a long period that lock capital and space, with little prospect of selling at normal price.Slotting — Strategically assigning products to warehouse locations based on rotation, size and affinity to minimise picking effort. Last updated: 2026-07-06