Summary
This article walks through how XYZ class is assigned. For ABC class calculations, refer to:
Applies To
All items in StockIQ
Process
The XYZ class code associated with an item helps give you a quick idea about how volatile or variable an item is in your inventory. It does this based on a measure that you configure, either:
- The Coefficient of Variation (cv)
- Historical Statistical Model Error
- Usage Pattern
'X' items are your least volatile/most predictable, Y items are more volatile/less predictable, and so on.
A special class, "N", is used for items where there is not enough data to effectively calculate a cv or model error.
When using the Usage Pattern method, the mapping of usage patterns to XYZ classes is as follows:
- Recurring: X
- Sporadic: Y
- Slow, Dead: Z
XYZ Classes are updated along with your ABC classes on the refresh frequency specified in your Class Settings.
The XYZ class ultimately helps determine the predictability of your item. More predictable items will have lower forecast error and therefore lower safety stock needs. So, even if you have two A items with identical overall ABC classing scores, one might require far more safety stock due to demand variability than the other, which can in turn necessitate different safety stocking and order policy strategies.