In ABC analysis, class items typically represent 20% of the SKUs but account for 80% of the dollar usage.
ABC analysis is an inventory management technique that determines the value of inventory items based on their importance to the business. ABC ranks items based on need, cost, and risk data, and inventory managers group items into classes based on these criteria. approach to categorizing inventory items. Consumption is the total amount of items consumed over a period of time, such as a year.
The purpose of ABC analysis is to help organizations determine where to best allocate resources to optimize results. ABC analysis is based on the principle of items in the same category (inventory, customers, documents, etc.).
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