Learn in the textbookBusiness Investigation Methods and QC-Style Problem Analysis
DefinitionABC analysis (ABC分析) ranks items into A, B and C based on the cumulative share of a measure such as sales, and manages the important A items most closely.
ExplanationItems are sorted from largest to smallest amount or quantity and divided by the running share added from the top (the cumulative share). The cutoffs depend on the purpose; in the table above, for example, items up to 75% cumulative are A, up to 95% are B, and the rest are C. It is used in inventory and product management to narrow down where effort should go.
AnalogyIt is like a library putting its most borrowed books on shelves near the entrance and moving rarely borrowed ones to the stacks. Effort goes to the few that move often.
Memory hookThe alphabetical order of A, B and C is the priority order. A comes first and C comes last.