Attention and Scope

Honest ABC Scope

ABC classes are heuristic policy labels, not an optimization certificate.

highlighted = computed this step

Threshold choice

The A threshold 2/3 is a policy choice.

threshold is a policy choice\text{threshold is a policy choice}
ABC attention ruleThe chart shows class labels as a management attention rule.ABC attention ruletotal annual use 150X 60Y 40W 30Z 20annual dollar use, sorted high to lowitemdemandcostusecum shareclassX106602/5AY202402/3AW3013013/15BZ54201CclassesA: X,YB: WC: Zthresholds are policy choices

Not an optimizer

ABC analysis does not choose order quantities, reorder points, or service levels.

ABC is not an optimizer\text{ABC is not an optimizer}
ABC attention ruleThe chart shows class labels as a management attention rule.ABC attention ruletotal annual use 150X 60Y 40W 30Z 20annual dollar use, sorted high to lowitemdemandcostusecum shareclassX106602/5AY202402/3AW3013013/15BZ54201CclassesA: X,YB: WC: Zthresholds are policy choices

Not a forecast

The demand and cost data are assumed inputs, not forecasts checked for accuracy.

inputs are assumed\text{inputs are assumed}
ABC attention ruleThe chart shows class labels as a management attention rule.ABC attention ruletotal annual use 150X 60Y 40W 30Z 20annual dollar use, sorted high to lowitemdemandcostusecum shareclassX106602/5AY202402/3AW3013013/15BZ54201CclassesA: X,YB: WC: Zthresholds are policy choices

Honesty note

ABC classes are a management attention rule, not an optimizer. Thresholds are policy choices, so the classes explain this pinned rule rather than proving an optimal stocking policy.

heuristic attention classes only\text{heuristic attention classes only}
ABC attention ruleThe chart shows class labels as a management attention rule.ABC attention ruletotal annual use 150X 60Y 40W 30Z 20annual dollar use, sorted high to lowitemdemandcostusecum shareclassX106602/5AY202402/3AW3013013/15BZ54201CclassesA: X,YB: WC: Zthresholds are policy choices