1. What is an ABC Analysis?
Back to the basics, an ABC analysis is a method for inventory holding companies to classify their inventory into different categories. The three categories are A, B and C and give an indication of the importance of an item to the business. If an item has a low contribution to the company’s performance it will be classified as a C item. When the item is however a fast mover and has a high impact, it will be classified as an A item.