ABC part
We distribute products by revenue at a level of deep detail and calculate the share and accumulated share. The group to which the product belongs — A, B or C — is determined by the accumulated share. According to the Pareto principle, the first group includes items with this indicator up to 80%, the second — up to 95%, the rest will make up group C.
Part A provides the maximum income, part B — “solid middle peasants”, and C — these are product items that should be given maximum attention in terms of shutdown or optimization.
At this stage, many companies make the main mistake, namely: they make list of us mobile number database intermediate conclusions about how to change their positioning and assortment. First, it is necessary to understand how stably each of these products brings in income.
XYZ part
It is necessary to split the revenue into dynamics. Classically, for all 12 months, to determine the most precise seasonality. However, if the situation is generally stable, it is enough to leave a sample of 6 months. Then we calculate the variation coefficient - this metric shows how much the indicators deviate from the average value. It is calculated in Excel using the formula =STDEV(B2:M2)/AVERAGE(B2:M2)*100, where B2:M2 is the range in which the data is specified (your range may be different). The indicator will be expressed as a percentage.
Sorting in ascending order, we get three new groups: X, with a variation coefficient of less than 10%, which generates revenue most stably. Y — from 11% to 25%, the sales volume of these products changes, but without sharp jumps. And Z with a deviation above 26%, where you should not count on this group or completely ignore it.