Chapter 2: ABC Analysis

IQ Analysis is a method used to analyze the shipment volume (Quantity) for each item (Item).

Application of ABC Analysis
Items are sorted by shipment volume and classified into three groups: A (High volume), B (Medium volume), and C (Low volume). This is essential for inventory management and distribution center planning.
The "80/20 Rule" Application
Generally, 20-30% of all items (I20–I30) account for 80% of the total shipment volume (GIQ80).
Analysis Tools
- IQ Table: A summary table of quantities and cumulative composition ratios.
- IQ Curve (Pareto Chart): A graph visualizing the distribution of shipment volumes. Often shown with the "ΣIQ Curve" (cumulative values).
ABCD Analysis
Items within the C group that rarely move or have zero shipments are distinguished as D group (Dead stock) to evaluate inventory health.

EQ Analysis is a method used to analyze the order quantity (Quantity) for each customer/order entry (Entry).

Importance of the Logistics Perspective
Instead of analyzing based on sales value (commercial flow), analysis based on "Quantity" allows for accurate assessment of logistics workload.
Distribution Trends
Similar to IQ analysis, it is common for 20-30% of all customers (E20–E30) to account for 80% of the total order volume (GEQ80).
Analysis Tools
- EQ Table: A table ranking order quantities by customer.
- EQ Curve: A graph visualizing customer bias. It confirms whether logistics workload is concentrated on specific customers.

IQ Analysis: Decides "Which items should be managed intensively?" (Storage location, replenishment frequency).
EQ Analysis: Decides "Which customers have the greatest impact?" (Packing methods, delivery routes).

Combining these two analyses makes it possible to build the optimal layout and work system for a distribution center.