The ABC analysis is a component of the analysis of the demand profile, which divides the articles sold into 3 categories, which correspond to different proportions of the total volume of demand and also to different proportions of the number of articles. Starting from a list of articles sorted by descending order of sales there is a set of articles (which usually represent about 20% of the total number of articles) accounting for 80% of the volume. These articles belong to category A. Category B accounts for 15% of the volume and normally comprises many more articles than category A. Category C represents the last 5% and usually comprises more articles than the sum of the previous ones. This analysis is usually done in quantity and value.
ABC Analysis is used in the definition of value chains and their planning, production and supply strategies. It also gives important inputs to the analysis of complexity and product ranges.