Abc Analysis

The document describes ABC analysis, a technique used to prioritize inventory items based on their revenue contribution. It provides an example of Sally, a grocery store owner, conducting an ABC analysis of her inventory. She lists each item, calculates the total revenue from each, and expresses it as a percentage of total revenue. This allows her to categorize items as A (highest revenue), B, or C (lowest revenue). The analysis shows that while balloons make up a large portion of items, stools contribute the most revenue and are categorized as A items.