Classify items by usage value.
Use it to decide how tightly to control each stock item. Paste items with annual usage and unit cost, and it ranks them by value and splits them into A, B and C classes.
Class A is the items making up the first 80% of value, B the next 15%, C the last 5%.
Value = annual units × unit cost. Class A gets tight control and frequent counts, class C simple rules such as two-bin.
ABC analysis ranks stock items by annual usage value (annual quantity × unit cost) so you can focus control where the money is.
Of 1,200 stock items, 140 (12%) make up 78% of usage value and become class A: counted monthly and reviewed weekly. 700 class C items move to two-bin kanban with a quarterly count.
A method of ranking items by annual usage value into A (high), B (medium) and C (low) classes to set different control policies.
Common cut-offs are 80/15/5 of value, but you can set your own limits in the tool.
A items are usually counted most often, C items least. The cycle count planner uses ABC classes.