April 12, 2023
Description
ABC XYZ Analysis is a categorization tool aimed at identifying the best-performing products in one’s catalog. This information is often used to set service level and safety stock targets. Unlike ABC Analysis, which focuses exclusively on a single variable (typically revenue), ABC XYZ attempts to quantify a second dimension (variance). In this tutorial, Conor explores ABC XYZ and delivers his verdict.
Key questions covered in this white-boxing:
- Does ABC XYZ deliver the kinds of insights it promises?
- Is its use of statistics sufficiently robust?
- Is it sensitive enough to subtle demand patterns?
Additional learning:
