What is ABC frequency?

ABC frequency refers to the categorization of inventory items based on their importance, often using the Pareto principle (80/20 rule). In this context, items are classified into three categories: A items are high-value, low-quantity items; B items are moderate in both value and quantity; and C items are low-value, high-quantity items. This classification helps businesses prioritize inventory management efforts, optimize stock levels, and focus resources on the most critical items.