<P> In materials management, the ABC analysis (or Selective Inventory Control) is an inventory categorization technique . ABC analysis divides an inventory into three categories - "A items" with very tight control and accurate records, "B items" with less tightly controlled and good records, and "C items" with the simplest controls possible and minimal records . </P> <P> The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost, while also providing a mechanism for identifying different categories of stock that will require different management and controls . </P> <P> The ABC analysis suggests that inventories of an organization are not of equal value . Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance . </P>

What is abc classification in inventory and control