Background

ABC Analysis, also known as Selective Inventory Control, is an Inventory Categorization Technique used in Materials Management, segregating the items into three categories, A, B and C items. It works on a tendency of in any series of items to be controlled, a selected small fraction of the number of elements will account for a large fraction of effect. This is in tuned with the Pareto Principle, expressed as the concept of “vital few and trivial many” or the “rule of 80/20”.