What term is used for the statistical method of observing usage patterns to optimize inventory management?

The term that describes the statistical method of observing usage patterns to optimize inventory management is ABC inventory. This approach categorizes inventory into three classes (A, B, and C) based on criteria such as monetary value and usage frequency.

Class A items are typically the most valuable and are closely monitored to manage their stock levels efficiently. Class B items are of moderate value and require a different level of management, while Class C items are of lower value and can be managed with less scrutiny. By conducting this type of inventory analysis, businesses can prioritize their resources and focus on managing their most critical items effectively, ensuring that they have the right amount of stock on hand without overstocking or running short.

Other methods like par stock involve maintaining a set inventory level, physical inventory refers to the actual count of inventory on hand, and min-max inventory establishes minimum and maximum thresholds for stock levels. While these methods play essential roles in inventory management, they do not specifically emphasize the statistical analysis of usage patterns in the same way that ABC inventory does.