Why do you need ABC XYZ analysis? ABC and XYZ analysis

One of the most common methods of assortment analysis is ABC analysis, which is based on the Pareto principle. The latter, in turn, states that 80% of the causes are responsible for 20% of the consequences. This rule, also called 80/20, means that in any process a small percentage of reasons (20%) are vital, and the remaining reasons (80%) do not have a serious impact on the final result.

This rule can be applied to various socio-economic phenomena and business processes. For example: 80% of the work is completed in 20% of the time; 80% of the company's profit comes from 20% of customers; 80% of warehouse space is occupied by 20% of inventory; 80% of sales volume is provided by 20% of sellers; 80% of problems are caused by 20% of defects, etc.

In each specific case, this proportion may deviate from the exact parameters of 80/20 and be 90/10 or 65/35. However, this does not change the essence and is that the largest percentage of the result is provided by a smaller percentage of costs.

As part of the assortment analysis, this rule says that 20% of products provide 80% of the store’s turnover.

ABC analysis method will allow you to determine those 20% of goods that are a priority for the store. In essence, this method involves ranking the product range according to various parameters. Traditionally, the entire assortment is divided into three groups of products depending on their contribution to the turnover and profit of the store:

1) goods of group A - the most important goods, providing the first 50% of results;

2) goods of group B - goods of medium importance, providing another 30% of the results;

3) goods of group C - the least significant goods, providing the remaining 20% of the results.

Traditionally, ABC analysis is carried out in three stages.

Stage 1. Determination of the object of analysis and parameters for its assessment.

The objects of analysis can be:

product groups;

commodity items;

suppliers.

Evaluation criteria may include:

sales volume (in physical and monetary terms);

turnover;

inventory, etc.

Stage 2. Compiling a list of analysis objects in descending order of the value of the selected parameter.

Stage 3. Determination of groups A, B and C, for which it is necessary to calculate the share of the parameter from the total sum of parameters with a cumulative total and distribute the objects of analysis into groups in accordance with the obtained values.

Let's consider ABC analysis by product groups using a specific example of a grocery store operating in the “shop near home” format.

Stage 1. Within the framework of this analysis, the object of research is product categories, including:

dairy products;

bakery products;

confectionery;

alcoholic products;

fruits and vegetables;

meat, sausage;

juices, water.

To carry out the analysis, it is necessary to systematize information on the turnover of each product group for a certain period (month, quarter, year). After this, it is necessary to calculate the share of each product group in the total turnover of the store (table).

Stage 2. Sort product groups in descending order of their share in turnover.

Trade turnover of product groups for the 1st quarter of 2010

Table

ABC analysis of store assortment

Thus, the ABC analysis shows that the main share of the store’s turnover is provided by such product groups as dairy products, baked goods and meat, sausages, which belong to group A. Product groups - juices, waters and fruits, vegetables belonging to group C, need development and require additional sales promotion actions, for example in the form of price reductions or product range expansion.

However, ABC analysis by product groups gives only a superficial idea of the structure of the store’s assortment. For a more detailed and in-depth analysis, it is advisable to conduct a similar analysis for product categories within product categories, since it is more informative and allows you to more effectively manage the assortment.

For a deeper study of the assortment, you can use XYZ analysis. It allows you to create a more complete picture of the trading process in the store.

XYZ analysis also involves dividing the store’s assortment into groups X, Y and Z, and the criterion for this analysis may be the profitability of goods or the stability of their sales.

In this case, most often the need to conduct an XYZ analysis arises when the store is faced with the task of analyzing the assortment simultaneously according to several parameters and presenting its results in the form of a matrix.

Let's consider the combination of ABC and XYZ analysis using the example of a food store.

The following product groups are the object of research:

dairy products;

bakery products;

meat and sausages;

confectionery;

alcoholic products;

fruits, vegetables;

juices, water.

The combined analysis includes the following stages.

Stage 1. Conducting ABC analysis. The criterion for dividing goods into groups within the framework of this analysis is the share of the product group in the total turnover of the store. The results of the analysis are presented in table.

ABC analysis

Stage 2. Conducting XYZ analysis. At this stage, the criterion for dividing goods into groups is the share of the product group in the store’s gross profit. The results of the XYZ analysis are presented in table.

Table

XYZ analysis

Stage 3. Combined analysis (ABC- and XYZ-). It is necessary to combine the results of ABC and XYZ analysis, as a result of which the entire assortment of the store is divided into 9 segments based on two criteria - the share of the product group in the store’s turnover and the share of the product group in the store’s profit. The results of the combined analysis are presented in table.

Table

ABC and XYZ analysis

The analysis made it possible to identify the most profitable and least profitable product groups for the store.

Thus, the most profitable product groups for a store are AX, BX, AY - groups that provide the greatest contribution to the turnover and profit generation of the store.

Groups requiring special interventions to improve their effectiveness include BY and CY. These groups have sufficient potential, but in order for them to move into the group of profitable products, it is necessary to optimize the assortment and pricing policy in relation to these groups.

Finally, the least profitable and poorly traded products include the BZ and CZ segments. These product groups require special attention from store management.

Algorithms,

Data visualization

Once upon a time, a store owner, who was also a seller, could easily remember all the products in his assortment. Tell about the features of each, the story, how effective the product is, knew exactly how it is sold, when to order more...

With the development of retail, managing the movement of goods requires different approaches. Sales accounting and analytics systems and assortment management complement the experience of store or retail chain employees.

Serious decisions, such as removing a product from the range, are not made so easily. Both the category manager and the store manager need justification for such actions.

Therefore, one type of analysis is not enough. A combination of several types is used (in other words, cross-analysis).

In this article, using the example of the “Confectionery” product group, we will consider the main approaches to organizing cross-analysis. We’ll also find out who is to blame for the fact that Raffaello is a product with unstable sales.

When working with the assortment of a chain or store, a cross-approach is used, which includes ABC and XYZ analyses.

What is the point and why do we choose them?

ABC analysis- This is a common method of studying the assortment, with which you can determine the contribution of each product to the turnover and profit of the store, distribute products into categories for effective assortment management.

Basic pros ABC analysis:

rationalization of assortment management - makes it clear the importance of goods, distributes the efforts of store managers and category specialists;
quick results and quick application of management decisions;
If carried out regularly, comparison with previous periods makes it possible to track the stages of the product life cycle.

Cons:

many additional factors must be taken into account, such as new products, luxury products, etc.
you need an array of data for analytics for a certain period: a database of receipts, sales or other retail data;
Stability in the goods market is important; if some unforeseen situations occur (sharp inflation, political unrest, etc.), ABC analysis data may be inaccurate.

More about the ABC analysis methodology.

XYZ analysis determines the stability of product sales over a certain period. The results allow you to categorize products and allocate storage space, inventory levels, and delivery arrangements.

Pros XYZ analysis:

data for managing the range of goods and warehouse stocks, organizing work with suppliers;
setting up different delivery options for different product categories;
using analysis to predict demand stability;
identification of problem stores with unstable sales;
identification of commodity gaps, correction of the goods supply system.

Cons:

What is needed, just like for ABC, is stability of indicators, without market shocks;
several years of data are required for a full analysis;
it is difficult to work with seasonal goods, and there are quite a lot of them in retail;
cannot be used on products with a short life cycle.

More about conducting XYZ analysis.

Combining the results of ABC and XYZ analyzes is a popular approach to product assortment management. Both methods complement each other well. If ABC analysis allows you to evaluate the contribution of each product to the sales structure, then XYZ analysis allows you to evaluate sales jumps and its instability.

By combining and using a cross-approach, we obtain the status or place of each product in the assortment of a product group, store or entire retail chain.

The use of combined analysis provides a number of additional advantages:

identification of products with stable sales, significant for the turnover of a store or chain, and unprofitable products;
increasing the share of profitable products without violating the principles of assortment policy;
determining the reasons affecting the quantity and location of goods stored in the warehouse;
redistribution of personnel efforts to manage the assortment and its warehouse stocks.

It is worth remembering that these types of analysis, as well as their combination, are only possible if there is a clear accounting of turnover and sales statistics.

Methods for conducting combined analysis

There are 2 ways to conduct cross-analysis: sequential and parallel.

The choice of one of them depends on the purpose and desired results. Let's explain in more detail.

Sequential method assumes that the analysis is first carried out according to one of the types, according to a separate criterion. Next, for each of the resulting categories, analysis is applied according to 2 criteria, or type, etc.

Visually it looks like this.

This approach is used for large data sets. For example, if cross-analysis is carried out across the entire assortment of the chain, across a large product group.

The second aspect is that such an analysis requires significant analytical efforts by its organizer. It is necessary to determine the importance of each criterion for future analysis and build the analysis structure in the right order.

For example, the goal of cross-analysis is to optimize space in a store’s warehouse, in which case the first criterion will be the stability of sales, i.e. XYZ analysis, the second criterion is the number of sales of each product according to ABC, the third is turnover, again according to ABC.

When choosing another goal - say, identifying luxury goods - the first analysis criterion will be Store Turnover, then the Number of Sales and Entry into Receipts. But the stability of product sales using XYZ analysis is not so important here.

Those. sequential analysis can be carried out if the number of products in a product group is large enough, if it is necessary to determine a policy for working with the group, develop a strategy for managing and promoting the necessary products.

Parallel The approach involves constructing a category matrix based on a given number of criteria, analyzing and working with each category in the cell of the matrix.

This is what the matrix for cross analysis of ABC and XYZ looks like. Usually, the analyst simplifies it further anyway and defines a general format of work for several categories.

For ABC analysis, the matrix can be built according to several criteria. For example, in the picture below A by turnover + A by number of sales + X by sales stability.

Let’s analyze the results obtained and go through only the key (boundary) categories:

АААХ - for leading products;
АААZ - goods that are important for the network’s turnover, but with unstable sales, which definitely need to be paid attention to;
BBBY - for average products;
CCCZ - for outsider goods.

Category AAHH- 28 products out of 1260.

The sweetest products. They provide the main turnover of the network, so their constant availability is necessary.

If we analyze the products included in this category, these are mainly chewing gum, cookies and popular children's sweets.

As you can see in the picture below, the largest number of sales are for chewing gum sold at the checkout counters, and they also have a fairly significant impact on the turnover of the product group.

There are two options for working with the category - creating excess “safety” stock or organizing “just-in-time” delivery, since goods are sold consistently and an accurate sales forecast is possible.

But it is worth remembering that AAX category products are key to the store’s operation, so if delivery fails at any stage, this can lead to significant problems in the store’s operation.

Why, given the high number of sales, significant impact on store turnover and frequent receipts, is sales of goods in this category so difficult to predict?

Visualization of key indicators - turnover and number of sales - showed that Raffaello sweets have the greatest impact on the turnover of the chain and its product group.

Judging by our life experience, they are quite popular. Why are their sales so unstable, the coefficient of variation is 0.73?

Having opened sales of a specific product, we received an answer to the question.

Sales of sweets of this brand simply take off twice a year - on February 14 and on March 8. Hence the instability.

transfer part of the goods to an ordering system with a constant order amount (volume);
ensure more frequent deliveries of some goods;
choose suppliers located close to the store, thereby reducing the amount of inventory;
increase the frequency of monitoring.

In the example with Raffaello, it is simply to ensure a larger supply of candies for the holidays.

Sales of goods are not stable enough to ensure constant availability, it is necessary to maintain a warehouse stock for insurance.

You can switch to a system with constant time or order quantity.

CCCZ, as the bottom category of the matrix, objectively the most problematic products - 85 entries.
It is important to remember that this may include new products, luxury goods, custom-made goods, etc. Therefore, the category requires a thoughtful analysis of each position, and only then radical action.

The screenshot below shows these products located in the graph area near 0 and having virtually no effect on the turnover of the retail network.

People love to choose. And that's a fact. Customers are pleased to purchase goods in stores that offer a wide range. But for owners of retail outlets, purchasing many items is not always profitable, because some items remain in the warehouse as “ballast”.

What to do: maintain a rich assortment to the delight of customers and periodically suffer losses due to unsuccessful positions, or reduce the choice of products and thereby lose some customers? Analysis of the assortment will help answer this question.

There are many methods for conducting assortment analysis. This article is devoted to the study of assortment using ABC and XYZ analysis methods. ABC analysis allows you to study the product range for its profitability for the seller, and XYZ analysis makes it possible to study the sellability of both individual products and product groups.

We will analyze the product range using the example of a grocery store. For the study, we take shelf-stable drinking dairy products.

ABC-assortment analysis

ABC analysis is a ranking of products according to certain criteria. With its help, it is possible to determine the highest priority product items and items the purchase of which can be completely abandoned. The idea of ABC analysis is based on the Pareto method, which, when applied to sales, states that 20% of products bring 80% of the store’s profit, and 80% of customers are satisfied with 20% of the assortment. Note that the 20/80 ratio is most common, but not required. It is quite possible that, according to the results of the analysis, it will be 30/70 or 10/90.

The purpose of the analysis is to distribute goods into groups. The classic ABC analysis technique assumes the presence of 3 groups: A, B and C. The improved version assumes the presence of 1 or 2 more groups: D and F.

A. Products whose sales bring the store 80% of its revenue.
IN. Products, the sale of which brings the store 15% of revenue.
WITH. Products, the sale of which brings the store 5% of revenue.
D. Products that are delivered exclusively to order.
F. New goods or completely illiquid goods.

Stages of ABC analysis of assortment

We calculate the annual sales volume and calculate the profit share of each product.

Table 1. ABC analysis, calculation example

Product	Cost of 1 liter, rub.	Annual sales volume, pcs.	Annual sales volume (income), rub.	Annual sales volume, %
1. Fresh milk
2.Baked milk
3.Fruit milkshake

5. Ryazhenka


8. Serum
9. Milk starter

Total

We calculate the annual sales volume on an accrual basis.

Table 2. ABC analysis, calculation example

Product	Annual sales volume, pcs.	Annual sales volume, thousand rubles.	Annual sales volume, %	Cumulative annual sales volume, %
1. Fresh milk


2.Baked milk
5. Ryazhenka

8. Serum
3.Fruit milkshake
9. Milk starter

Total

We divide products into 3 categories in accordance with the classical methodology.

Table 3. ABC analysis, calculation example

Category	Variety of goods	Quantitative share	Cost share, %

	№2, №5, №7
	№3, №6, №8, №9, №10

XYZ-assortment analysis

Conducting an XYZ analysis provides a clear picture of demand for each product item. With its help, you can identify the most popular products and products that, for some reason, are not constantly in demand. The results of XYZ analysis allow you to optimize inventory.

XYZ analysis involves dividing goods into 3 groups.

Group X. Products for which demand is stable. The coefficient of variation of such goods is up to 10%.

Group U. Products for which demand fluctuates slightly. The coefficient of variation of such goods ranges from 10% to 25%.

GroupZ. Products for which demand is almost impossible to predict. The coefficient of variation of such goods is more than 25%.

Stages of implementationXYZ analysis

We will conduct the analysis for the year, broken down by quarter.

Finally, we calculate the coefficient of variation (Kv - V).

Where:
- the value of the parameter (for us - sales volume) for the object being valued for the i-th period;
— average value of the parameter for the assessed object;
n is the number of periods.

Table 4

Product	Sold in the 1st quarter, rub.	Sold in the 2nd quarter, rub.	Sold in the 3rd quarter, rub.	Sold in the 4th quarter, rub.	Sold per year, rub.	Average value	Meaning radical expression
1. Fresh milk
2.Baked milk
3.Fruit milkshake
4. Kefir
5. Ryazhenka
6. Cream
7. Yogurt
8. Serum
9. Milk starter
10. Ayran
Total

Combining results

As a result of double analysis (ABC + XYZ), it is possible to create a matrix in which each product will be included in one of 9 groups.

Table 5

Summary of the two types of analysis

Fresh milk and kefir are the most stable and profitable products.

They are in demand, and therefore must always be available. At the same time, you should not stock up on them, since their consumption is perfectly predictable. Ryazhenka brings good revenue to the store, but is not sold consistently enough. To ensure its constant availability, it is necessary that the product is purchased in reserve and is always present in the warehouse. The store’s revenue from baked milk and yogurt is quite significant and allows us to classify these products as “B” category. As can be seen from Table 4, in the spring-summer period these products are sold out better, and therefore it is worth increasing the amount of inventory during this time period. The profit from cream and sourdough is small. But you don’t have to stock up on these products, since the demand for them is stable, and you can buy exactly as much as customers consume. You can completely avoid ayran, whey and fruit milkshake, or you can purchase them in minimal quantities to maintain the range. It is difficult to predict the consumption of these goods, and the revenue from their sale is quite insignificant.

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Ministry of Education and Science of the Russian Federation

Federal State Budgetary Educational Institution of Higher Professional Education Ural State Economic University

Coursework

In the discipline "Organization of commercial activities"

On the topic: “ABC and XYZ analysis”

Completed:

Student Makeev A.S.

Specialty: Commerce

Scientific supervisor: Lunev V.G.

Ekaterinburg 2014

Chapter I. Theoretical material

1.1 Operating principle of ABC analysis

1.2 Working principle of XYZ analysis

1.3 Interaction of ABC and XYZ analysis

Chapter II. Practical work

2.1 Application of ABC analysis to assortment positions

2.2 Application of XYZ analysis to assortment items

2.3 Construction of the ABC-XYZ analysis matrix

Conclusion

List of sources used

Chapter I. Theoretical material

Traditional ways of accounting for sales and costs can mislead managers and lead them to make poor decisions. To prevent such problems in an enterprise, there is a simple way to make decisions related to product pricing - ABC analysis.

Consequently, the first problem solved with the help of ABC is to establish adequate costs per unit of product and, accordingly, adequate prices. However, even the correct use of ABC does not guarantee the company automatic leadership in the market. In many cases, ABC goes beyond the accounting concept and turns into a cost management method that helps influence the cost-generating factors of certain types of activities. Based on ABC, management decisions are made on market segmentation and expansion of product lines, establishing new forms of relationships with consumers, and improving business processes. XYZ works well with ABC analysis. When used correctly, the combination of these two components gives a clear picture of all processes associated with the sale of products, and stimulates the making of the right decisions in the enterprise. pricing management statistics sales

High-quality management of a company’s goods involves conducting a daily detailed analysis of a large amount of information on sales statistics, product inventories, illiquid items, etc.

If you carefully analyze such statistics for each individual product, then there simply will not be enough working time for this. Therefore, the question always arises of which products need to be analyzed every day, and which products need to be checked once a week or even once a month.

ABC-XYZ analysis allows you to answer this and many other questions.

The ABC analysis method involves determining for each product group its role and place in the trade and technological process based on taking into account the specific features of product groups, as well as the degree of their importance for consumers.

The advantages of ABC and XYZ analysis methods are simplicity, accuracy and clarity, and the possibility of automation. The disadvantages of both methods are that they do not allow for the correctness of conclusions when constructing a complex, poorly structured product assortment.

1.1 Operating principle of ABC analysis

The idea of ABC analysis is based on the Pareto principle, which is formulated as follows: “20% of efforts give 80% of the result, and the remaining 80% of efforts give only 20% of the result,” i.e. 20% of all goods give 80% of turnover. By applying this rule to the goods of any trading company, you can take a very simple step towards implementing logistics.

ABC analysis is a method that allows you to classify a company's inventory according to its importance by dividing it into three categories. The classic boundaries are as follows:

A - the most valuable, 20% - inventory; 80% -- sales;

B - intermediate, 30% - inventory; 15% -- sales;

C - the least valuable, 50% - inventory; 5% -- sales.

The procedure for performing ABC analysis is as follows:

1. Selection of an object and parameter (the characteristic by which we will conduct the analysis). Typically, the objects of ABC analysis are product groups, product categories or product positions. Each of these objects has different measurement parameters: sales volume, both in monetary and quantitative terms, income (in monetary terms), inventory, turnover, etc.

3. Selection of A, B and C groups. To do this you need:

*assign group values to selected objects.

1.2 Working principle of XYZ analysis

XYZ analysis is a mathematical and statistical method that allows you to analyze and predict the stability of sales of certain types of goods and fluctuations in the level of consumption of certain goods.

The purpose of XYZ analysis is to divide goods into groups depending on the uniformity of demand and forecasting accuracy.

The XYZ analysis method is similar to ABC analysis and is based on the same principle - products are divided into three groups X, Y and Z, based on the value of the coefficient of variation over a certain period of time. This analysis divides objects according to the degree of deviation from an average calculated over several periods.

The smaller the coefficient of variation, the more accurate the forecast. The more stable the demand for a product, the easier it is to manage, and accordingly, the lower the need for product inventories, the easier it is to plan the movement of the product. Thus, additional material appears for making decisions about the product’s presence in the store’s assortment matrix.

Stages of XYZ analysis:

1. Selecting an analysis object (group, category, position) and a parameter by which objects will be compared (monthly sales, for example). Typically, the objects of XYZ analysis are a product category or product unit. The analysis is based on a sales period of at least three months.

2. Determining the number of periods for which the analysis will be carried out: week, decade, month, quarter/season, half-year, year. The longer the period, the better, the more accurate the analysis result will be. If a product has a turnover of more than a month, then it is necessary to take a period of at least three times the turnover.

There are several types of XYZ analysis, for example, analysis of planned data with actual data, which gives a more accurate % deviation from the forecast. Very often, XYZ analysis is carried out in conjunction with ABC analysis, allowing one to identify more precise groups regarding their properties.

The coefficient of variation is the ratio of the standard deviation to the arithmetic mean of the measured resource values.

Calculated using the formula:

where: - coefficient of variation

Standard deviation

Arithmetic mean

I-th value of the statistical series

Number of values in a static series

1.3 Interaction of ABC and XYZ analysis

2. Determine which objects belong to the group X, Y and Z.

Thus, the point of ABC analysis is to determine the contribution of a specific product to the final result (most often to the company’s overall profit).

The meaning of XYZ analysis is to study the stability of sales, study deviations, jumps, and instability of product sales.

Of course, you can use each type of analysis separately, but this will not give a complete picture of the company’s assortment matrix, so it is recommended to use both types of analysis in combination in order to identify strong and weak products, sales stability, and key products for the company.

XYZ analysis is very good in combination with ABC analysis - this is the identification of undisputed leaders and outsiders in the store’s assortment.

ABC-XYZ analysis allows you to divide sales data into 9 groups depending on the contribution to the company's revenue (ABC) and the regularity of purchases (XYZ).

After carrying out these two types of analysis, a final matrix is compiled, the assessment of which allows for the optimal formation of stock in the warehouse (Table 1).

For example, cell AX should contain positions assigned to group A when classified using the ABC method and to group X when classified using the XYZ method. This classification simplifies the work when planning and forming an assortment.

Table 1

ABC and XYZ matrix

Chapter II. Practical work

2.1 Application of ABC analysis to assortment positions

1. Purpose of the analysis: reducing the total volume of inventory in order to reduce the cost of maintaining it and freeing up resources to expand the range.

2. The control object is a separate assortment item.

3. A sign of differentiation of the assortment into groups A, B and C is the share of annual sales for a particular product item in total sales.

4. Calculation of the share of individual assortment items in total sales.

Table 2

Calculation of the product's share in total sales

Product name

Bar "Mars"
Milky Way bar
Nesquik bar
Twix bar
Bounty milk
Chewing gum "Boomer"
Chewing gum "Dirol"
Chewing gum "Minton"

Chewing gum "Super"


Ketchup "Bulgarian"
Ketchup "Monarch"
Kinder surprise
Arabica coffee ground


Corn flakes with sugar
Noodles "Doshirak"
Almonds in chocolate

Long rice
Round rice
Packaged granulated sugar


Waffle cake
Tea Ahmad
Indian tea
Chupa Chups
Chocolate "Alenka"

Chocolate "Inspiration"
Chocolate "Delight"
Chocolate "Bell Tower" porous
Chocolate "Coffee with milk"
Chocolate "Teddy bear"
Chocolate "Nesquik"
Chocolate "Nestlé Classic"
Chocolate "Travel"
Chocolate "Retro"
Chocolate "Russian"
Chocolate "Russian"
Chocolate "Pushkin's Tales"
Chocolate "Sudarushka"

Chocolate with peanuts
Chocolate with coconut
Chocolate drink "Nesquik"

5. Sorting assortment groups in descending order of share in total sales (Table 3).

Table 3

ABC analysis

Product name	Annual sales volume of the product, thousand rubles.	Product share in total sales, %	Number of assortment items in the ordered list, cumulative as a percentage of the total number of assortment items	Product share by incremental total (OY axis), %
Instant coffee "Nescafe Classic"

Chewing gum "Dirol"
Twix bar
Instant coffee "Nescafe Gold"
Bar "Mars"
Bounty milk
Packaged granulated sugar
Arabica coffee ground
Chewing gum "Stimorol"
Noodles "Doshirak"
Long rice
Nesquik bar
Chewing gum "Boomer"
Milky Way bar
Chocolate "Russian"
Chocolate "Alenka"
Chewing gum "Super"
Round rice
Chocolate "Russian"
Chocolate "Nestlé Classic"
Chocolate drink "Nesquik"
Chewing gum "Minton"
Chocolate "Retro"

Chocolate "Teddy bear"
Chocolate "Alpen Gold" with nuts and raisins
Ketchup "Bulgarian"
Tea Ahmad
Chupa Chups
Corn flakes with sugar
Chocolate "Coffee with milk"
Kinder surprise
Chocolate "Pushkin's Tales"
Chocolate "Inspiration"
Almonds in chocolate
Chocolate "Delight"
Ketchup "Monarch"
Chocolate "Nesquik"
Chocolate with coconut
Waffle cake
Chocolate "Travel"
Indian tea

Chocolate with peanuts
Instant goulash soup

Chocolate "Bell Tower" porous
Chocolate "Sudarushka"
Chocolate Airy white porous

6. Dividing the assortment into groups A, B and C (Table 4).

Table 4

Percentage ratio of groups A, B and C of the assortment

2.2 Application of XYZ analysis to assortment items

1. Calculation of demand variation coefficients for individual assortment items.

2. Sorting assortment items in increasing order of the coefficient of variation (Table 5).

3. Dividing the analyzed assortment into groups X, Y and Z (column 5 of Table 5).

Table 5

Company products arranged in increasing order of sales variation coefficient

Product name	Coefficient of variation	Ordered list line number	The number of assortment items in the ordered list, cumulatively, as a percentage of the total number of assortment items (OX axis)	Group (X,Y or Z)

Chocolate "Russian"

Instant coffee "Nescafe Gold"
Instant coffee "Nescafe Classic"
Twix bar
Chocolate "Alenka"
Packaged granulated sugar
Arabica coffee ground

Chocolate "Inspiration"
Bounty milk
Long rice
Corn flakes with sugar
Chocolate "Nesquik"
Chupa Chups
Tea Ahmad
Chewing gum "Super"
Chocolate "Pushkin's Tales"
Ketchup "Bulgarian"
Chocolate "Russian"
Indian tea
Chocolate "Retro"
Chewing gum "Dirol"
Chocolate "Coffee with milk"

Bar "Mars"
Chewing gum "Minton"
Chocolate drink "Nesquik"
Chewing gum "Boomer"
Chocolate "Delight"
Noodles "Doshirak"
Chocolate "Alpen Gold" with nuts and raisins
Chocolate "Teddy bear"
Chocolate with coconut
Instant goulash soup
Chewing gum "Stimorol"
Kinder surprise
Almonds in chocolate
Milky Way bar
Round rice
Ketchup "Monarch"
Nesquik bar
Waffle cake
Chocolate "Travel"
Chocolate "Bell Tower" porous

Chocolate "Sudarushka"
Chocolate "Nestlé Classic"
Chocolate with peanuts
Chocolate Airy white porous

2.3 Construction of the ABC-XYZ analysis matrix

Proposals for inventory management systems for product items of groups AX, AY, AZ, as well as group B and group C.

Note. The matrix cells contain position numbers.

Table 6

ABC-XYZ Matrix

(4, 5, 16, 17, 18, 23, 25, 26)
(10, 22, 32, 44)	(6, 8, 33, 38, 42, 43, 50)
(19, 29, 31, 34, 39)	(12, 13, 15, 27, 30, 35, 37, 45, 49)	(11, 14, 21, 28, 36, 41, 46, 47, 48)

For positions included in the AX group, the optimal order size should be calculated and the possibility of using just-in-time technology should be considered; positions included in the AZ group should be monitored daily. Obviously, due to large fluctuations in demand, it is necessary to provide a safety stock.

Inventory management for items included in the groups BX, BY, BZ can be carried out using both the same and individual technologies (both in terms of planning periods and delivery methods).

Inventory planning for product items included in the CX, CY, CZ groups can be carried out for a longer period, for example, a quarter, with daily or monthly checking of stock availability in the warehouse.

Conclusion

Applying ABC and XYZ analysis to an assortment position turned out to be not difficult. Using analysis in an enterprise will significantly reduce costs and increase profits. But we must not forget that analysis will not lead you to become a market leader. Only an entrepreneur can become an absolute leader by making non-standard decisions.

The advantages of ABC and XYZ analysis methods are simplicity, accuracy and clarity, and the possibility of automation. When used correctly, the combination of these two components gives a clear picture of all processes associated with the sale of products, and stimulates the making of the right decisions in the enterprise.

ABC and XYZ analysis are modern marketing tools, the combined use of which with other methods of analysis helps solve issues of assortment and pricing policy, selection of market segments and sales channels, inventory management, and increasing the efficiency of using marketing communications tools.

List of sources used

1. ABC analysis // http://www.abc-analysis.ru/

2. Sterligova A. N., “Inventory management of a wide range of products. Where to start?”, LogInfo magazine dated 12.2003

3. Bodryakov Roman. Seminar on ABC and XYZ / Roman Bodryakov // http://www.rombcons.ru/ABC_XYZ.htm

4. Buzukova E.A. Analysis of assortment and sales stability using ABC analysis and XYZ analysis. [Electronic resource] -- Access mode. -- URL: http://zakup.vl.ru/files/avs_i_huz_analizi.pdf

5. Bodryakov R.E. ABC and XYZ: -- compilation and analysis of the final matrix. [Electronic resource] -- Access mode. -- URL: http://www.rombcons.ru/logistik2.htm

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What is ABC analysis

The meaning of ABC analysis can be considered to be the selection in a business from a large number of similar objects those on which you need to focus the main attention based on a specific chosen goal. This method can be used in different directions: to optimize the assortment, analyze the customer base, and increase sales efficiency.

ABC analysis is based on the ideas of Pareto, who claims that in business only 20% of investments always give 80% of the results. It is this segment that he recommends focusing efforts on.

In ABC analysis, business factors are divided into 3 categories:

A - the most valuable resources (20%), the result of which in business is 80%;
B - 30% of resources giving 15% of the result;
C - 50% of resources, of which the result is only 5%.

Why do you need ABC XYZ analysis? ABC and XYZ analysis

What is the point and why do we choose them?

Methods for conducting combined analysis

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