X-Y-Z Analysis: Criterion employed: Amount invested in the inventory of each of the items
XYZ analysis is based upon the value of the stocks, which are held. In other words, the investment made in the inventory of each of the items is detailed, Those items, whose inventory investments values are high, are called as X items. Y items consist of those items whose investment inventory values are moderate. While Z items are those items whose investment inventory values are low. Normally XYZ analysis is used along with either the ABC analysis or with HML analysis. When combined with ABC analysts it is as detailed below:
| Class of
Items |
A | B | C |
| X | Efforts to be made to reduce stock to Z category | Efforts to be made to convert stock to Y category | Steps to be taken to dispose off surplus stocks. |
| Y | Efforts to be made to convert stock to Z category | * | Control on stocks may
be further tightened. |
| Z | * | Stock levels may be reviewed, say twice a year. | * |
Note: *Represents those items which are within control. Therefore no further action about them is found necessary.
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