When calculating your forecasts, SKU Science also computes each article's weight (percentage) compared to all the elements available on the platform. This method is an application of the Pareto principle according to which 80% of turnover is achieved with 20% of products.

Each article is compared to the others, receives an associated percentage, and is given a class A, B, or C according to its weight. The A products are the most important, the B comes next, and finally, the C items are normally the least representative of your business.

The objective is to focus on articles A and B as a priority, and not to spend too much time on articles C.

SKU Science allows you to configure the calculation of the ABC class.

This calculation follows certain rules that can be defined in the "Class ABC" tab.

You will understand how to modify this ABC classification by reading this article, depending on your focus: quantities, revenue, cost, margin.

To access the definition of the ABC class, all you have to do is click on the gear icon, then select Rules.

Then, you access this interface.

Classification method

This list allows you to choose between 4 options.

  • Quantity (default choice)

  • Cost

  • Price (Revenue)

  • Profit

By default, the calculation is based on quantities, but if you have taken the time to fill in the financial information of your items, it is a better option to select "Price" to reflect the financial weight of each item in your turnover.

History or forecast

Then you can decide to calculate the percentage based on historical data or based on forecast. By default, the calculation is made on the historical demand.

Number of periods

Here you decide how many periods to consider for the calculation.

Class A percentage

By default, it is set to 75%.

This value means that all the most important items by weight, up to a total of 75% of the classification method used, will receive a class A.

Class B percentage

By default, it is set to 15%

This value means that all articles located in the following 15%, i.e. from 75% to 90% will receive class B.

By clicking on Save, your parameters will be used during the next computation cycle.

Start a manual calculation of ABC classes

To restart the calculations immediately, all you have to do is go to Forecast Edition. Check that you do not have any aggregated fields (if necessary remove the aggregation using the Aggregation fields... button).

Then you just have to click on the calculator icon, circled in red below.

Next, you will see a pop-up window. Make sure to uncheck all the tick boxes except, ABC classes computations. Then click on Confirm & Launch to obtain a new calculation of percentages and ABC classes.

Did this answer your question?