XYZ Analysis
XYZ analysis is an inventory management and supply chain methodology used to classify items based on their demand variability and predictability. It extends the ABC analysis by adding a third dimension (Z) to account for demand patterns, helping organizations optimize stock levels and reduce costs. This technique categorizes items into X (stable demand), Y (moderately variable demand), and Z (highly variable or unpredictable demand) groups.
Developers should learn XYZ analysis when working on inventory management systems, supply chain software, or e-commerce platforms to implement intelligent stock classification algorithms. It is particularly useful for optimizing warehouse operations, forecasting demand, and reducing excess inventory or stockouts in applications handling large product catalogs.