A B C Inventory

Statistics have shown that the 80/20 rule applies to inventory and sales. 80% of the inventory can be attributed to 20% of the SKUs and 80% of the items sold can be attributed to 20% of the SKUs. Therefore, if we can identify the items that are in the top20% of both categories, then we have identified the items with high volume and high velocity. And conversely, the items that are in the bottom 80% in both categories are slow moving or dead items.