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Inventory & supply chain

ABC analysis calculator — Pareto inventory classes

Paste item values and run an ABC analysis: Pareto ranking, cumulative percentage, and A/B/C classes with your own thresholds, plus value per class.

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Short answer

ABC analysis ranks items by annual value, then splits them into classes at cumulative-value thresholds, commonly 80% for A and 95% for B. In a 12-item list worth $1,174,430, four A items carry 82.5% of the value and five C items carry 4.8%. Class decides count frequency, buffer size and review effort.

ABC analysis sorts your items by annual value and splits them into three classes so that attention follows money. It exists because inventory effort is finite: you cannot review 8,000 items weekly, and you do not need to.

Paste one item per line — a name, then its annual value, separated by a comma or a tab. The calculator ranks them, works out each item's share and the running cumulative percentage, assigns classes at thresholds you control, and summarises count and value for each class.

Value means annual usage value: quantity consumed in a year multiplied by unit cost. Ranking on the on-hand balance instead tells you what you have too much of, which is a different and also useful question — just not this one.

Your numbers

One item per line: name, then value. Comma, tab, semicolon or pipe separated, value last. Currency symbols, thousands separators and quoted names are fine. Blank lines, heading rows and lines starting with # are ignored.

% cumulative

Items are class A until cumulative value reaches this share. Clamped between 1% and 99%.

% cumulative

End of class B. Everything above it is class C. Forced above the A threshold.

Result

Class A
4 A items

82.5% of $1,174,430 in annual value, from 12 items ranked

Items ranked12
Total annual value$1,174,430
Class A4 items · 82.5%
Class B3 items · 12.8%
Class C5 items · 4.8%
Top 20% of items (3) hold74.3%
Class A — 4 items82.5% of value · 33% of items
Class B — 3 items12.8% of value · 25% of items
Class C — 5 items4.8% of value · 42% of items
Class summary. Percentages are shares of the pasted list, not of your whole catalogue.
ClassItems% of itemsAnnual value% of value
Class A433.3%$968,43082.5%
Class B325.0%$149,90012.8%
Class C541.7%$56,1004.8%
Ranked highest value first. Class changes where cumulative value crosses each threshold.
Rank and itemAnnual value% of totalCumulative %Class
1. Hydraulic pump HP-400$412,38035.1%35.1%A
2. Servo drive SD-22$268,40022.9%58.0%A
3. Gearbox GX-90$191,25016.3%74.3%A
4. Bearing set B-1180$96,4008.2%82.5%A
5. Control board CB-7$74,9006.4%88.8%B
6. Coupling C-45$41,2003.5%92.3%B
7. Sensor kit SK-12$33,8002.9%95.2%B
8. Seal kit SK-88$22,6001.9%97.1%C
9. Filter cartridge F-210$15,4001.3%98.5%C
10. Belt drive BD-6$9,8000.8%99.3%C
11. Fastener pack FP-100$6,2000.5%99.8%C
12. Grease cartridge G-14$2,1000.2%100.0%C
12 items parsed · total annual value $1,174,430
Sorted descending; cumulative % measured before each item is added
Class A = up to 80% cumulative → 4 items, $968,430 (82.5%)
Class B = 80% to 95% cumulative → 3 items, $149,900 (12.8%)
Class C = above 95% cumulative → 5 items, $56,100 (4.8%)
The top 20% of items hold 74.3% of the value — a normal Pareto shape. Give the 4 class A items individual attention and put the 5 class C items on a policy you never have to think about.

Everything is computed in your browser. Nothing you type is sent anywhere or stored.

The formula

Cumulative % = (Running total of ranked item values ÷ Total value) × 100 → A while cumulative % is below the A threshold, B while below the B threshold, otherwise C
Item value
Annual usage value: annual quantity consumed × unit cost. Not the on-hand balance and not the unit price alone.
Total value
The sum of every ranked item's value. Every percentage on the page is a share of this figure.
A threshold
Cumulative-value cut-off for class A, conventionally 80%.
B threshold
Cumulative cut-off for the end of class B, conventionally 95%. Everything after it is class C.

The item that crosses a threshold is kept inside the lower class, so class A is the shortest list of items whose combined value reaches the A threshold. That is why four items can hold 82.5% of value under an 80% rule.

Worked example

Items pasted
12
Total annual value
$1,174,430
A threshold
80%
B threshold
95%
Result
A: 4 items, 82.5% of value · B: 3 items, 12.8% · C: 5 items, 4.8%

The largest item, at $412,380, is 35.1% of the total on its own. Cumulative value passes 80% at the fourth item, so class A is 4 items worth $968,430. It passes 95% at the seventh, making class B three items worth $149,900. The remaining five items are class C: $56,100, or 4.8% of value for 42% of the item count.

What each class earns you

The classes are only worth producing if they change a policy. A class that gets the same treatment as the rest of the catalogue is a label, not a control.

ClassTypical share of valueCount frequencyPolicy
AAbout 80%Monthly or continuousForecast individually, review buffers often, tight lead-time management, escalate shortages.
BAbout 15%QuarterlyFormula-driven min/max, exception reporting, review when demand shifts materially.
CAbout 5%Annually or on a two-bin triggerOrder in bulk, hold generous cover, automate. Cheap to over-stock, expensive to manage.
Share of value is the conventional starting point, not a target. Your own distribution is whatever the paste produces.

Reading the distribution, not just the classes

  • A steep curve — one or two items over 30% of value — means concentrated supply risk. Dual-source those before you optimise anything else.
  • A flat curve, where the top 20% of items hold under 50% of value, means ABC will not buy you much. Segment by demand variability or margin instead.
  • A long C tail is normal and usually fine. C items are worth managing by policy, not by attention: bulk orders, generous cover, one count a year.
  • Items that jump classes every quarter are the interesting ones. A C item moving to A means demand has changed and nobody re-planned it.

Using ABC to set counting effort

Cycle counting is where ABC pays for itself fastest. Counting 4 A items monthly, 3 B items quarterly and 5 C items annually is 48 + 12 + 5 = 65 counts a year, and it puts 82.5% of the value under monthly scrutiny. A blanket quarterly count of all 12 items is 48 counts and leaves the concentrated value under-checked.

Scale that to a real catalogue with the cycle count sample size calculator, and check what the C tail is actually costing you to hold with the inventory carrying cost calculator.

Getting annual usage value out of the ERP

The classification takes a second once you have the list. Building the list is the work: twelve months of issues by item, at a consistent cost basis, excluding intercompany transfers and returns, for items that were active for the whole window. New items and discontinued lines both distort the ranking if you leave them in unadjusted.

With you ask for the list directly: "annual usage value by item for the last 12 months, excluding intercompany, ranked descending". It runs against your own account and prints the query underneath, so you can confirm the cost basis rather than assume it.

Frequently asked questions

How do you do an ABC analysis of inventory?

Multiply each item's annual usage quantity by its unit cost, sort the list from highest value to lowest, and take a running cumulative percentage of total value. Items up to roughly 80% cumulative are class A, up to 95% are class B, and the rest are class C. Then assign different counting, buffer and review rules per class.

What percentages should I use for ABC classes?

80% and 95% of cumulative value are the common starting points, giving classes of roughly 80/15/5 by value. Adjust them to the shape of your own curve: if the top items are extremely concentrated, an 70% A threshold may produce a more workable A list. The thresholds are policy choices, not formulas.

Should ABC analysis use annual usage value or unit cost?

Annual usage value — quantity consumed over a year multiplied by unit cost. Unit cost alone would classify an expensive item nobody uses as class A. A $4 part consumed 90,000 times a year deserves more attention than a $9,000 spare that moves once every three years.

Which class does the item that crosses the 80% line belong to?

Convention keeps it in class A. The item is included if the cumulative percentage before it is still below the threshold, which makes class A the shortest set of items whose combined value reaches 80%. Either rule is defensible, but pick one and hold it, or items will appear to change class between reviews for no real reason.

How often should ABC classification be refreshed?

Quarterly for most operations, or after any material change in demand or assortment. Refreshing monthly makes items flip class on noise, which destroys the stability that policies depend on. Track which items change class between refreshes — that list is often more useful than the classification itself.

Is ABC analysis the same as the 80/20 rule?

It applies the same idea but with three bands instead of two. The Pareto observation is that a small share of items carries most of the value; ABC turns that into an operating policy by adding a middle class and defining thresholds. Your own data rarely lands on a clean 80/20 split, and it does not need to.

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