Create a robust business case with a … ABC/XYZ analysis is a method of grouping planning objects (characteristic value combinations, SKUs) based on their value (revenue or sales volume) and dynamics of consumption or sales. ABC analysis can be used for different purposes. Base the business case on data that’s reliable. Roughly 10 percent to 20 percent of inventory items account for … ABC and XYZ analysis in Excel with example of calculation. For the analysis of the assortment of goods, «prospects» of clients, suppliers, debtors are used methods ABC and XYZ (rarely). Check to ensure that systems and processes can be adapted to ABC/XYZ before embarking on the change. 2. This article is part 1 of a 3 part series on ABC Inventory Analysis. Be realistic about the resource and time demands required for implementation. Let us understand the dominant strategy with the help of the example given in Table-1. There are lots of assumptions for each categorization. Regardless of the strategy pursued by ABC, XYZ's best strategy is to produce a high level of output, and for that reason producing a high level of output is a dominant strategy for XYZ. Part 1 introduces the concept of ABC classification.. Part 2 provides a step-by-step walk through of how to conduct ABC Analysis.. Part 3 shares a few tips on properly conducting ABC analysis.. For Lean Manufacturing, Start With the ABC’s. ABC classification has an important assumption which is 80-20 rule. Therefore one must carefully study the requirements before any of these categorizations are applied [4]. Based ABC-analysis – is the famous Pareto principle, which states that 20% of efforts give 80% of the result. Dominant and Dominated Strategies: A dominant strategy is the one that is best for an organization (player) and is not influenced by the strategies of other organizations (players). During the analysis, the planning objects are assigned one of the classes of ABC and XYZ simultaneously. It has also been applied to various other business and economic situations.. ABC classification is based on Pareto’s Law, which states that a small percentage of items accounts for a large percentage of value. The ABC XYZ classification thus provides a framework for developing and refining inventory management strategies by classifying products according to their sales volume (ABC) but also according to their uncertainties (XYZ). Suppose organizations ABC or XYZ adopt a dominant strategy. After making a list of these critical spare parts, you can break them into priority categories using the ABC and XYZ analysis methods. 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