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ABC analysis is a method of categorizing inventory into three categories (A, B, and C) based on their importance.
A items: High-value items with low sales frequency.

B items: Moderate-value items with moderate sales frequency.

C items: Low-value items with high sales frequency.
FMS (Fast, Medium, Slow) analysis classifies inventory based on the speed at which items move.
Fast-moving items: High turnover rate, frequently sold.

Medium-moving items: Moderate turnover rate.

Slow-moving items: Low turnover rate, infrequently sold.
ABC analysis helps you prioritize your inventory management efforts. Focus on high-value items (A items) to ensure they are always in stock, while also managing moderate and low-value items efficiently.
By categorizing items based on their value and movement speed, you can optimize stock levels, reducing excess inventory and minimizing stockouts. This ensures that you have the right amount of stock at the right time.
Efficient inventory management through ABC and FMS analysis helps improve cash flow. By focusing on high-value and fast-moving items, you can increase sales and reduce holding costs.
