ABC Analysis

Based on 2023 full-year picks across three warehouse lanes. I ranked by annual consumption value (qty × extended cost).

Financial documents and charts with a magnifying glass, symbolizing analysis and data review.
ClassSKU Count% of SKUs% of Total ValueAction Rule
A24812 %74 %Count every 4 weeks; backordered if below 14 days cover
B74136 %21 %Count every 8 weeks; reorder at 21 days
C1,06252 %5 %Count quarterly; dormant after 180 days

Class-A worked example

SKU: WH-7421 • Widget housing, annealing grade 2. Annual picks: 18,442 units • Unit cost: $4.37

Consumption value = 18,442 × $4.37 = $80,590.54
Daily avg velocity: 50.5 units/day • 14-day safety cover: 707 units

Cycle count difference ≤ 1 % → no action. Difference > 1 % but ≤ 3 % → recount next day. Difference > 3 % → eight-point verification, update bin master.

Class-C worked example

SKU: WH-9108 • Retainer clip, cadmium-plated. Annual picks: 312 units • Unit cost: $0.58

Consumption value = 312 × $0.58 = $180.96
180-day dormancy check: if last issue > 180 days → status «SUSPENSE» and hold 50 % of on-hand.

Next: Cycle Count Protocol — daily worksheet format and escalation rules