Glossary
What is ABC Analysis?
Last updated July 2026
Definition
ABC analysis classifies inventory into A, B, and C tiers by value or usage, so attention and controls concentrate where they matter most.
Typically a small share of SKUs (A items) drives most of the value, while a long tail of C items drives most of the transactions. Different tiers deserve different policies.
For surplus, an ABC-style view of fair-market value shows that a small set of items usually carries most of the recoverable cash.
Part of Excess & obsolete inventory.
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