What is the difference between ABC and XYZ analysis?

ABC analysis ranks items by their share of a measure such as revenue or picks. XYZ analysis ranks them by how steady demand is, measured with the coefficient of variation σ/μ.

Which ABC analysis is used for slotting?

The one by picks. In the app the mean travel per pick is 50.6 m with pick ABC and 56.4 m with revenue ABC. That is 36 km less travel per day.

Why are expensive items not always fast movers?

High revenue can come from a high price with few picks. In the case study 86 revenue-A items are C by picks, for example a bean-to-cup coffee machine with 21 picks a year.

What limits apply to the XYZ analysis?

There are no fixed standard values. The app uses X up to 0.25 and Y up to 0.5 as an assumption; each company sets the limits based on its demand pattern.

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ABC-XYZ Lab

About this app

ABC analysis as a Lorenz curve by revenue and by picks, XYZ via the coefficient of variation, an ABC-XYZ matrix and a pallet warehouse where you compare slotting by revenue ABC, pick ABC or at random, with travel per pick and per day. Case DC Neckar with 5,200 items.

With explain mode: an AI tutor walks you through the app, points out what matters in the scene and answers your questions.

Two views of the ABC analysis

ABC analysis sorts items in descending order of one measure and accumulates their share: A up to 80 %, B up to 95 %, the rest is C. Which measure to use depends on the purpose. Replenishment and stock control follow value, that is revenue. Slotting follows pick frequency, that is the number of order lines. XYZ analysis groups items by how much their demand fluctuates, measured as the coefficient of variation v = σ/μ of weekly demand. The limits X up to 0.25 and Y up to 0.5 are an assumption and have to be set by each company.

What the app shows

The basis is the fictional distribution centre DL Neckar with 5,200 items and 52 weekly values each. Two Lorenz curves show the ABC distribution by revenue and by picks. 86 items that are A by revenue fall into class C by picks: expensive items that rarely move. The ABC-XYZ matrix combines both analyses. A pallet warehouse with ten aisles calculates the mean travel per pick: 56.4 m when slotting by revenue ABC, 50.6 m by pick ABC and 91.0 m for random slotting. Per day that is 351, 315 and 566 km.

What you can try

Move the class limits of the ABC and XYZ analyses and watch classes, matrix and travel distances change. Switch slotting between revenue ABC, pick ABC and random and compare the travel. You can look at single items, such as an expensive slow mover or a cheap fast mover. The travel model treats each pick as a single cycle from the transfer point to the slot and back, without lifting or waiting times.

Frequently asked questions

What is the difference between ABC and XYZ analysis?: ABC analysis ranks items by their share of a measure such as revenue or picks. XYZ analysis ranks them by how steady demand is, measured with the coefficient of variation σ/μ.
Which ABC analysis is used for slotting?: The one by picks. In the app the mean travel per pick is 50.6 m with pick ABC and 56.4 m with revenue ABC. That is 36 km less travel per day.
Why are expensive items not always fast movers?: High revenue can come from a high price with few picks. In the case study 86 revenue-A items are C by picks, for example a bean-to-cup coffee machine with 21 picks a year.
What limits apply to the XYZ analysis?: There are no fixed standard values. The app uses X up to 0.25 and Y up to 0.5 as an assumption; each company sets the limits based on its demand pattern.

Subject: Warehouse planning with AI

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