Okuzeka
Industrial Engineering & Manufacturing vocabulary · Inventory and Materials

ABC analysis

Meaning in industrial engineering & manufacturing, with examples

nounCommon term

In industrial engineering & manufacturing, ABC analysis means: Sorting stock items into three groups by value: A items are few but make up most of the value, C items are many but low in value, and B items are in between.

In Turkish: ABC analizi, ABC sınıflandırması

How it is used

Based on the Pareto principle: often around 20% of items make up 80% of annual consumption value. Planners use ABC analysis to decide how tightly to control each item, for example counting A items more often and reviewing their safety stock carefully.

Example sentences

  1. According to our ABC analysis, 140 A items account for 78% of inventory value.

  2. Let's update the ABC analysis before we change the stock counting plan.

Common collocations

  • A items
  • ABC class
  • ABC classification
  • carry out an ABC analysis
  • inventoryAll the materials and products a company holds: raw materials, parts, work in progress and finished goods waiting to be sold.
  • Pareto chartA bar chart that sorts problems or causes from the most to the least frequent, with a line showing the cumulative percentage, so a team can focus on the few that matter most.
  • safety stockExtra stock kept on top of normal needs to protect against unexpected demand or supplier delays.
  • economic order quantityThe order size that gives the lowest total cost by balancing the cost of placing orders against the cost of holding stock. Shortened to EOQ.

More terms: Inventory and Materials

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level: