ABC Inventory Calculator

Each class gets a different level of effort. A-items: cycle count weekly or monthly, hold generous safety stock, reorder from real forecasts, and negotiate hard with suppliers. B-items: standard reorder points, quarterly review. C-items: simple min/max rules, annual counts, minimal or zero buffer, and ruthless pruning of ones that stop selling. The payoff is focus — tight control where 80% of the money is, cheap automation everywhere else.

No — it is the classic Pareto pattern, and this calculator uses it as an estimate. Real catalogs run anywhere from 70/20/10 to 90/8/2 depending on how head-heavy your sales are. The class boundaries are also yours to draw: this tool defaults to 20/30/50 of SKUs but lets you tighten the A-cut. Treat the output as a sizing guide, then rank your actual SKUs by annual COGS to draw the real lines.

Twice a year for most stores, quarterly if your catalog turns over quickly with launches and discontinuations. Products migrate: last year’s A-item bestseller fades to B, a new launch rockets into A within a quarter, and seasonal SKUs can be A-class in Q4 and C-class in July. A stale classification quietly gives your best sellers C-item treatment, which is how top SKUs end up stocking out.

Annual consumption value — units sold × unit cost (COGS) — is the textbook basis because inventory control is about the money tied up in stock. But running the analysis a second time on contribution profit is revealing: a high-revenue, thin-margin SKU may deserve less buffer cash than the ranking suggests, while a modest seller with fat margins earns A-class protection. Where the two rankings disagree is exactly where judgment beats the formula.