Basic Principles: ABC analysis is the process of dividing stock-keeping units (SKUs) into three (3) classes according to their dollar usage so that managers can focus on items that have the highest dollar value. This method is the equivalent of creating a Pareto chart except that it is applied to inventory rather than to process errors (Krajewski, Malhotra, & Ritzman, 2016). EQQ Model (Heizer, Render, & Munson, 2017)