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XYZ Analysis in inventory analysis

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The ABC analysis is a primary analysis. It can be used as a basis for follow-up or secondary analyses such as the segmentation or the XYZ analysis. The XYZ analysis enables you to perform the next step of the inventory analysis. The following typical classification has been generally established: � X materials X materials are characterized by a constant, non-changing usage over time. The requirements fluctuate only slightly around a constant level so that the future demand can basically be forecast quite well. Unfortunately, experience has shown that even the forecast for X products can be poor. With X products, it’s important to recognize fluctuations straightaway so you can respond quickly and appropriately. For this reason, you should install an outlier correction process, for example, in demand planning � Y materials The usage of these materials is neither constant nor sporadic. With Y materials, you can often observe trends, for example, that the usage increases or decreases for awhile, or that it is characterized by seasonal fluctuations. For these materials, it’s harder to obtain an accurate forecast . � Z materials These materials are not used regularly. The usage can strongly fluctuate or occur sporadically. In these cases, you can often observe periods with no consumption at all. The creation of a forecast is extremely demanding and very difficult. It is useful to further subdivide the Z materials into Z1 and Z2 materials, the latter being used even less regularly than the Z1 materials. This enables you to trigger detailed counteractive measures for particularly critical materials (