ECONOMICS

Detailed explanation-1: -The Pareto Principle says that most results come from only 20% of efforts or causes in any system. Based on Pareto’s 80/20 rule, ABC analysis identifies the 20% of goods that deliver about 80% of the value.

Detailed explanation-2: -ABC analysis, also known as Pareto analysis, is a method used to categorize something according to its importance or value in a given context.

Detailed explanation-3: -ABC analysis is an approach for classifying inventory items based on the items’ consumption values. Consumption value is the total value of an item consumed over a specified time period, for example a year.

Detailed explanation-4: -What is ABC analysis? ABC analysis is a categorization technique used in inventory management. The technique is based on the Pareto principle (or 80/20 rule), which states that 80% of the consequences originate from 20% of the causes, meaning that the relationship between inputs and outputs is unequal.