How to conduct a range analysis
Define the object of analysis of the assortment. As the test unit may be any product category, item unit, group or subgroup of products. If your company is engaged in wholesale sales, explore clients, debtors and suppliers. Please note that if your goal is to manage the assortment, it is best to analyze items, i.e. any item. If you are interested in the structure of the assortment, pay special attention to the product category.
Select the parameter that will be further analyzed. They may be gross revenue, sales volume, average commodity ordering, the total number of orders and their volume. They can be evaluated according to several parameters simultaneously. In this case, the data obtained for each parameter are compared with other results. Calculate the total value of the selected attribute.
Determine the percentage of each position relative to the final result. This will clearly show you which product group or nomenclature unit brings the most revenue, is expensive, and so on.
Perform a ranking of the objects of analysis. Arrange for descending surveyed positions. The principle responsible for the position of a particular category will be your chosen parameter.
Calculate the concentration with the result of the accumulation of analysis. For that opposite to the top categories, check the value of the share identified in the previous steps. Opposite the second category to its immediate share add previous value, etc. In the end, the bottom line is you should have 100%.
Distribute product categories into groups. Most often allocate from 2 to 4 sets. Its further fate and the ways to manage it depend on which group you assign to one category or another.