Table 1 of classification of articles for the ABC method

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It is important to emphasize the idea behind this analysis:

A small percentage of our items represent almost all of our value and that is why we must focus on this group A and pay more attention to it.

Summarizing:

- Class A" stock will include approximately items representing 80% of the total stock value, 20% of the total items.

- Class B" items represent 15% of the total stock value, 30% of the total items.

- Class C " items represent 5% of the total stock value, 50% of the total items.

This is why we should focus on class A items and a little less on class B items. If you have questions and want to know more to implement this method and learn how to organize the merchandise , keep reading.

We can see it better through an example: Example of product classification according to the ABC method.

A company has ten different items in its warehouse, valued as follows:




First, we sort the products according to their value. We calculate the different percentages, both simple and cumulative. We can use a table to help us see it more clearly.

We also see the accumulated percentages of both articles and investment or value, since that is what we are going to put on the axes to visualize the graph more clearly.

Table 2 of the ABC warehouse item classification method



Table 3 of the ABC warehouse item classification chile phone data method Graphical representation of the ABC classification or Pareto diagram.



We can see how only 20% of all our articles generate 80% of the total value (or investment, profits, etc.).

(A). This is why we must use a strict stock control system for this type of items, with continuous reviews of stock levels and increased attention. The next 30% represents 15% of the total value.
(B). These items are of medium importance and intermediate control must be carried out.
50% is only 5% for us (C). For type C items we apply less rigid control.