Line segment analysis helps make startegic decissions easy to substantiate. In business, there is one thing that really counts. You see, no one cares about profits, or net earnings. At the end of the day, all that matters is cash—how much cash a company has and can generate, especially in tough economic times.

By segmenting your inventory by the criteria, as described below, you will improve your inventory turnover and become more profitable

Key:

A, B and C represent inventory with set-down parameters.

X,Y and Z represent demand within the set parameters.

We can categorise your inventory into the following grouping

AX = Higher sales, Stable demand (Where we strive to position your inventory to maximise profits)

AY = Higher sales, Fluctuating demand

AZ = Higher sales, highly sporadic demand

BX = Average sales, Stable demand

BY = Average sales, Fluctuating demand

BZ = Average sales, highly sporadic demand

CX = Low sales, Stable demand

CY = Low sales, highly sporadic demand

CZ = Low sales, Highly sporadic demand (where we reduce our stock holding to unlock cash

Imagine if you could take disparate products, bundle them together, and sell them. By discovering a correlation between inventory items, both can become profitable.