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);
Y: > 10% & <=25
Z: > 25%
In the presentation below, how to do it is explained in detail visually and a sample document is provided;
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