ABC analysis means ‘Always Better Control’ is a technique which classifies the VARIOUS items of inventory according to their IMPORTANCE. It is an analytical method of inventory control which concentrates on the most significant inventory items. For example: A CLASS consists of those items which are LESS in number but most important in nature. B class consists relatively less important items. C class consists of large number of items which are less important. The importance of various items is decided on the basis of following factors:

• Critical nature of inventory
• Amount of investment
• Value of material consumed.

ABC analysis means ‘Always Better Control’ is a technique which classifies the various items of inventory according to their importance. It is an analytical method of inventory control which concentrates on the most significant inventory items. For example: A class consists of those items which are less in number but most important in nature. B class consists relatively less important items. C class consists of large number of items which are less important. The importance of various items is decided on the basis of following factors: