ABC Analysis

ABC Analysis is a technique which has been into use by businesses for long and is the categorization of large data into smaller groups. The smaller groups are often marked A, B & C and thus the name ABC Analysis. The activities of a project are ranked upon these general criteria:

• A – Tasks that are perceived as being urgent and important
• B – Tasks that are important but not urgent
• C – Tasks that are neither urgent nor important

Each group is then rank-ordered in priority. To further refine the priority, some individuals choose to then force-rank all "B" items as either "A" or "C". ABC analysis can incorporate more than three groups. ABC analysis is frequently combined with Pareto analysis.