What does ABC inventory classification mean?

ABC inventory classification meaning in Law Dictionary

The Pareto evaluation as related to inventory control. You can find three categories for products at issue. It is according to their income generation, return, or value. Typically this is done on ABC model where an A is top stock and C could be the even worse stock. Other terms for this concept tend to be consumption worth analysis and ABC analysis.

ABC inventory classification meaning in Business Dictionary

Inventory control centered on a type of Pareto evaluation. The inventory things tend to be split into three groups (A, B, and C), based on a criterion such as for example revenue generation, return, or value. Usually, 'A' products represent 20 % with regards to amount and 75 to 80 % in terms of the worth. Also called usage value evaluation. See also ABC analysis.