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ABC-analysis of products | Free template

ABC-analysis of products is a free template that can be used to classify products according to their annual turnover. An ABC-analysis divides the products into three categories, A-products, B-and C-products.

ABC-analysis is based on the Pareto principle or the 80-20 rule, which means that a few factors account for a large part of the result. The 80-20 rule can be applied to most of the things in nature and so also in terms of products. The ABC-analysis the annual turnover is estimated as the annual quantitative volume multiplied by the unit cost. For each product the percentage of annual turnover is calculated as the annual turnover of the product divided by the total annual sales for all products.

In an ABC-analysis the products are divided into three different categories even if you do not need to make a formal classification, A-products are products that represent 15% of the products and 70-80% of annual revenue, B-products are products that represent 30% of products and 15-25% of annual revenue and C-products are products that represent 55% of the products and about 5% of annual revenue.

An ABC-analysis is made to know which products the company should concentrate on and what products that not should receive equal attention. For A-products and the suppliers of those products purchase resources should be greater compared with the C-products. A product must be counted more frequently and sales forecasts must be made more carefully on these products compared with B-and C-products.

You can use this template to make an ABC analysis for your products, if you have many products, it is better to use inventory software or inventory system for this analysis.
Updated: 01-01-2015 | Created by

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Tags: purchasing procurement supply chain inventory