Inventory
ABC Analysis
What is ABC analysis in inventory management?
ABC analysis classifies inventory into three categories based on value and volume: A items (high value, ~20% of SKUs, ~80% of revenue), B items (moderate), and C items (low value, high volume). Each category gets different planning treatment — A items warrant tight forecasting and frequent review, while C items can use simpler replenishment rules. In African FMCG, ABC segmentation must also consider informal channel importance.
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