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# XYZ Analysis / RRS Analysis

## What is XYZ Analysis?

XYZ Analysis is a Demand Forecast Analysis that takes into account statistical data as a continuation of ABC Analysis (Pareto Analysis). In other words, it adds a horizontal, statistical dimension to ABC Analysis, which operates vertically.

Determines how to act according to product demand fluctuations.

## How is XYZ Analysis done?

ABC Analysis is done,

The period intervals to be analyzed are determined,

Standard Deviation of the specified period is calculated,

Coefficient Variation is found => Standard Deviation / Period Average,

XYZ Grouping is done (Percentages can be revised according to need);

X: <=10

Y: > 10% & <=25

Z: > 25%

In the presentation below, how to do it is explained in detail visually and a sample document is provided;

**ABC-XYZ Quandrant**

## Some Benefits of XYZ Analysis

Gives direction on which products to focus on

Helps keep inventory costs to a minimum on a periodic basis

Reduces the possibility of being out of stock

Helps use production capacity efficiently

## My related articles

## Resources

[Article] LeanDna / From ABC to XYZ: Understanding the XYZ Analysis

[Article] Oliver Horse / Using ABC-XYZ analysis to optimize your forecast in SAP APO

[Youtube] Lokad / ABC XYZ Analysis - Supply Chain in 3 minutes