ABC Analysis
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
Inventory is divided into three categories: A (extremely important, accounting for about 70% of value but small in quantity), B (moderate), and C (trivial, large in quantity but low in value). A items are tightly controlled, while C items are managed loosely.
SCAFFOLDING EFFECT
Reduce cognitive load
Allocate effort. Do not treat all things equally. For A tasks (e.g., strategic decisions), precision to the minute is needed; for C tasks (e.g., buying office supplies), allow waste and ambiguity, because the cost of managing C may exceed its value.
Anchor fast decisions
Based on the Pareto principle (80/20 rule). A small number of categories contribute most of the value (A items account for about 10-20% of quantity but 70-80% of value), so management precision should be allocated according to value, not quantity. The mechanism is the 'unbalanced distribution of value and quantity'.
MINIMUM ACTION
In progress 0/4Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/ABC_analysisverified
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