Forecasting & Analytics

ABC / Pareto Classifier

Classify SKUs into A/B/C tiers by annual value · the 80/20 rule made visual

Pareto Curve (cumulative value)

SKU	Annual value	% of total	Cum %	Class

A items

B items

C items

A = % of value

A cut-off (% of cum. value) 80%

B cut-off (% of cum. value) 95%

Number of SKUs 30

ABC / Pareto Classification

A small share of items drives most value - the 80/20 rule applied to inventory.

Items are ranked by annual value; class A gets tight control, B moderate, C minimal.

Spend management attention where value concentrates; automate the C class.

rank by annual usage value; A ~ top 80% of value

Pareto principleABC analysisAnnual usage valueCycle counting