Which inventory management process analyzes a drug's purchase history and its percentage of total annual drug costs?

The ABC analysis is a method of inventory management that categorizes inventory items based on their importance, which is typically determined by analyzing their purchase history and contribution to total annual drug costs. In this approach, items are often classified into three categories:

• 'A' items, which are high-value drugs that represent a significant percentage of total costs but may account for a smaller number of total items.

• 'B' items, which are of moderate value and cost implications.

• 'C' items, which are low-cost drugs that constitute a large portion of the inventory but a small fraction of total costs.

This method allows pharmacy technicians and managers to prioritize their inventory control efforts, focusing more resources on the 'A' items that significantly impact financial outcomes. By understanding the purchase history and cost distribution, pharmacies can make informed decisions regarding stocking levels, ordering frequencies, and inventory investments, ultimately contributing to more efficient and cost-effective operations.