What is it?
ABC analysis helps set inventory management systems and processes based on the consumption value of stocked items. However, it takes no account of consumption volatility. So two items with similarly high consumption values but very different patterns of demand may be subject to the same inventory management policies and process, which may not be appropriate. For example:
Item 1001 costs $10,000 and demand is reliable at two per month throughout the year.
Item 1002 costs $1,000 and