Definition
A method of sorting items into three groups (A, B, and C) based on criteria such as annual dollar volume. Group A includes the most significant items (10–20%), which account for 50–70% of the dollar volume. Group B often represents 20% of the items and about 20% of the dollar volume. Group C comprises around 50% of the items but often only 10–30% of the dollar volume. The principle focuses on tighter management for Group A and less strict control for Group C.
Learn more about ABC Classification
Companies invest years and millions optimizing their inventories. It’s time for a new approach to calculate safety stock while still meeting customer service during critical promotion periods.
Supply chain professionals should be wary of using AI to make System-2 decisions. While fast, real-time planning has appeal, it should largely be used to automate operational execution rather than planning processes that are more tactical,…
Companies commonly use inventory management policies that employ standard formulas for specific demand distributions and remain unchanged for several years.
