ABC Classification for Inventory Optimization

Abstract

Inventory Classification is very important to manage inventory efficiently. Popular concept - Importance and Exception (CIE) is employed to ensure that efficiency is maximized with least effort .For inventory optimization and Inventory Forecasting, products need to be classified appropriately. There are several methods used for categorization of products and items in inventory. Most common classification used is the Pareto Analysis. The focus of this paper is to check if some assumptions for ABC Analysis are taken for granted.