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:

ABC Analysis

ABC XYZ Analysis

Priorized Inventory Replenishment