What is ABC/XYZ analysis in SAP (SCM-APO-FCS - Demand Planning)?

SAP Term: ABC/XYZ analysis

• Component: SCM-APO-FCS

• Component Name: Demand Planning

• Description: A method of grouping planning objects characteristic value combinations, SKUs based on their value revenue or sales volume and dynamics of consumption or sales. During the analysis, the planning objects are assigned one of the classes of ABC and XYZ simultaneously. Analysis based on value ABC analysis can be done by applying Pareto's rule on the value of individual items in a specific time horizon. Analysis based on the dynamics of consumption XYZ analysis means the calculation of a variance coefficient for example, standard deviation of consumption or sales in a specific time horizon. For example, a planning object that has the values BY might mean a planning object with medium volume, and trend or seasonal demand.

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• Key Concepts: 
  ABC/XYZ analysis is a method used in demand planning to categorize items based on their importance. It is used to identify the most important items in a given set of data. Items are categorized as A, B, or C based on their importance, with A being the most important and C being the least important. XYZ analysis is similar to ABC analysis, but it categorizes items based on their variability instead of importance. 
  
  How to use it: 
  In SAP SCM-APO-FCS Demand Planning, ABC/XYZ analysis can be used to identify the most important items in a given set of data. To do this, the user must first select the items they want to analyze and then assign each item an A, B, or C rating based on its importance. Once the ratings have been assigned, the user can then use the analysis to identify which items are most important and which are least important. 
  
  Tips & Tricks: 
  When using ABC/XYZ analysis in SAP SCM-APO-FCS Demand Planning, it is important to remember that the ratings should be assigned based on importance rather than variability. Additionally, it is important to remember that the ratings should be assigned objectively and not based on personal preference. 
  
  Related Information: 
  ABC/XYZ analysis is a type of demand planning tool that can be used in conjunction with other demand planning tools such as forecasting and inventory optimization. Additionally, ABC/XYZ analysis can be used in conjunction with other analytical tools such as regression analysis and cluster analysis.