"It is called ABC analysis because of the 3 categories, but it is strange that no one questions this. Depending on the purpose, couldn't 4 or 5 categories be more effective?"
In practical logistics system design, 10 categories are too many to manage, but 5 categories make the allocation of logistics equipment exceptionally smooth.
The "5-Category Method" in Tera Calculation
Tera Calculation (T.Calc) breaks the mold of traditional ABC analysis by implementing a unique 5-category program, referred to as "Conventional Calculation" within the software.
- A1 (50%): Automated Storage and Retrieval Systems (AS/RS)
- A2 (20%): Mobile Racking
- B (15%): Mobile or Static Racking
- C (10%): Static Racking
- D (5%): Static Racking
By using 5 categories, the degree of freedom in simulation increases, allowing for more precise investment planning for distribution centers.