What is the objective of XYZ analysis?

XYZ Analysis helps you identify the surplus items value in the frequency segments so as to vary your inventory policies.

The ability to categorize items based on frequency of demand is especially applicable to businesses that manage spare parts or carry a significant number of low-frequency or low-volume products. The challenge of forecasting items with irregular sales patterns is especially daunting. That challenge can be addressed in part by isolating those items and applying specific inventory and review policies, and applying the appropriate inventory replenishment policies.

The classifications that result from XYZ Analysis are sometimes referred to as Runners, Repeaters and Strangers, and they can be categorized as follows:

X Items - or "Runners" - are products that have had demand in at least 10 of the last 12 months.

Y Items - or "Repeaters" - are products that have had demand in at least 4 (and no more than 9) of the last 12 months

Z Items - or "Strangers" - are products that have only had demand in 3 or fewer months out of the last 12 months.

4. to take out surplus items value

Thanks for  invitation I apologize ,.. I leave the answer for professionals

Thanks for the invite I agree with the experts answers

·         To arrange products according to their consumption (turnover is constant, fluctuating, irregular) to derive an optimal inventory strategy.

Non of the above.

XYZ analysis is to 

 to take out surplus items value.

I would like to go with all export .... To take out surplus value ..Thanks for letting me know.

To take out surplus items value....................

Hello Team,

XYZ analysis is one of the basic supply chain techniques, often used to determine the inventory valuation inside Stores.

It's also strategic as it intends to enable the Inventory manager in exercising maximum control over the highest stocked item, in terms of stock value.  A system of categorization, with similarities to Pareto analysis, the method usually categorizes inventory into three bands with each band having a different management control associated. Although different criteria may be applied to each category the typical method of “scoring” an inventory item is that of annual stock value of said item (qty in stock X cost of item) with the result then

Ranked and then scored (X, Y or Z). 

Bandings may be specific to the industry but typically follow a 70%, 90%, 100% banding in that X class items represent 70% of the stock value (although they may account for 20% number wise), Y class items fall between 70% and 90% of the annual stock value with C class the remaining. In practical terms the complex high cost materials typically fall into the X class items, with the consumable, low cost (and typically fast moving) classed as X class. Not all stock is equally valuable and therefore doesn’t require the same management focus. The results of the XYZ analysis provide information that helps evaluate how each inventory part should be monitored and controlled. These controls are typically: X class items which are critically important and require close monitoring and tight control – while this may account for large value these will typically comprise a small percentage of the overall inventory count.

Y class are of lower criticality requiring standard  controls and periodic reviews of usage. Z class require the least controls, are sometimes issues as “free stock” or forward holding.

Regards,

Saiyid

The correct answer goes to serial No: 4- To take out surplus value.

All given answers here are correct.Thanks