Criteria for item analysis
- “Forecastability” (= expected accuracy of forecasting)
- Expected customer order frequency (daily versus yearly)
- Strategic position in the product portfolio (“must have on stock” versus “can be produced over a given lead-time” or new item versus phase-out)
- Market availability ( generic item versus unique product)
- Different cost aspects (both unit cost as profitability)
- Purchasing or production process (e.g. items with common sub-assemblies that get unique during last production steps)
- Special storage conditions
- Any other relevant criterion for your business
Extended Pareto analysis (ABC analysis but with additional classes)