What is ABC analysis?

Ranking items by annual consumption value into A, B and C classes.

What is XYZ analysis?

Classifying items by demand variability: X steady, Y variable, Z erratic.

Are the 80-15-5 splits fixed?

No, they are typical; set thresholds from your own data.

Can software do ABC automatically?

Yes. NexoraIMS classifies every product on the Inventory health page.

ABC Analysis in Inventory: How to Classify Your Stock

A few products usually make most of your money. ABC analysis finds them so you can spend your attention and cash where it counts.

What ABC analysis is

ABC analysis ranks items by their annual consumption value (annual units × unit cost) and splits them into three classes. It is the Pareto principle applied to stock.

Class	Share of items (typical)	Share of value (typical)	Control
A	About 10-20%	About 70-80%	Tight: frequent review and counts
B	About 30%	About 15-20%	Moderate
C	About 50%+	About 5-10%	Simple, bulk ordering

The percentages are conventions, not laws; set thresholds that suit your data.

Worked example

Item	Annual value (₹)	Cumulative %	Class
Laptop 14"	24,00,000	60%	A
Monitor 24"	8,00,000	80%	A
Keyboard	4,00,000	90%	B
Mouse	2,40,000	96%	C
Cables	1,60,000	100%	C

Add XYZ for demand variability

XYZ looks at how steady demand is: X is steady, Y varies, Z is erratic. An A-Z item (high value, erratic demand) needs the most care; a C-X item can be automated.

What to do with each class

A: count often, negotiate contracts, track daily, hold small safety stock
B: review monthly
C: order in bulk, count rarely
Z items: keep forecast and safety stock under review

In NexoraIMS

The Inventory health page assigns ABC value class, XYZ steadiness and Fast/Slow/Non-moving movement to every product, with a 0-100 health score and the reason. See inventory analytics software.