Inventory Management
Cycle Counting Best Practices for Retailers
A practical guide to cycle counting in retail. Frequency by SKU class, count cadences, accuracy targets, and pitfalls.
7 min readRead
ABC Analysis Calculator
Classify SKUs into A, B, and C tiers based on revenue contribution. Paste a list and get instant classification.
Inputs
Enter your numbers
One SKU per line, format: name,revenue
Result
Your calculation
Classification
3 A · 1 B · 3 C
Total SKUs
7
Total Revenue
$33400.00
A Share of Revenue
79.3%
C Share of Revenue
7.2%
Formula Used
A: top 80% of revenue · B: next 15% · C: last 5%
| SKU | Revenue | Share | Cumulative | Class |
|---|---|---|---|---|
| SKU-A | $12000.00 | 35.9% | 35.9% | A |
| SKU-B | $8500.00 | 25.4% | 61.4% | A |
| SKU-C | $6000.00 | 18.0% | 79.3% | A |
| SKU-D | $4500.00 | 13.5% | 92.8% | B |
| SKU-E | $1200.00 | 3.6% | 96.4% | C |
| SKU-F | $800.00 | 2.4% | 98.8% | C |
| SKU-G | $400.00 | 1.2% | 100.0% | C |
Advertisement · AdSense Placeholder (inline)
Formula
A: top 80% of revenue · B: next 15% · C: last 5%
ABC analysis ranks SKUs by revenue, computes the cumulative share, and classifies items into A (top ≈80% of revenue), B (next ≈15%), and C (last ≈5%). Apply different inventory policies by class.
Worked Example
With seven SKUs totaling $33,400 in revenue, the top two SKUs ($20,500 — 61% cumulative) are A items, the next three ($11,700 — to ≈96%) are B items, and the bottom two are C items. You would set higher service levels for A items and consider phasing out C items.
Frequently Asked Questions
What thresholds should I use?+
A common split is 80/15/5. Some operators use 70/20/10. Pick a split and apply it consistently.
Can I use gross profit instead of revenue?+
Yes — profit-weighted ABC often gives a more strategic classification, especially in low-margin categories.
How often should I rerun ABC analysis?+
Quarterly is standard, monthly for fast-moving or trend-sensitive categories.
Related Articles
Deep-dive guides that explain the math behind this calculator.