• ecommerce, order fulfillment
    Pareto Principle Calculator
    80/20 Rule

Pareto Principle

The Pareto Principle - 80/20 Rule of SKUs

Warehousing is comprised of two activites - Handling and Storage. 

  • 20% of  inventory constitutes fast movers = majority of handling costs
  • 80% of inventory is stored the longest = majority of storage costs

 20% of SKUs = 80% of Volume

  • Typical Breakdown of 20%

    • 10% of SKUs = 50% of Volume
    • 10% of SKUs = 30% of Volume

 80% of SKUs = 20% of Volume

  • Typical Breakdown of 80%

    • 30% of SKUs = 15% of Volume
    • 50% of SKUs = 5% of Volume

 

PARETO Calculator Section

    Enter values              
Number of SKUs              
Total Number of Pallets              
Inventory turns/year              
Number of Shifts              
                   
Breakdown of SKUs       Breakdown of Pallets      
10% of SKUs       50% of Pallets      
10% of SKUs       30% of Pallets      
30% of SKUs       15% of Pallets      
50% of SKUs       5% of Pallets      
                   
                   
Pallets/ SKU         Store at this depth:    
Top 10%   pallets per SKU   Top 10%   Pallets deep  
Next 10%   pallets per SKU   Next 10%   Pallets deep  
Next 30%   pallets per SKU   Next 30%   Pallets deep  
Bottom 50%   pallets per SKU   Bottom 50%   Pallets deep  
                   
Utilization   4     Pallet Moves   4    
Top 10%   Utilized   Hour      
Next 10%   Utilized   Day      
Next 30%   Utilized   Week      
Bottom 50%     Month      
Analysis
For better warehouse space utilization consider storing these fast moving SKUs
this number of pallets deep
Store the next fast moving SKUs
this number of pallets deep
For your 3rd fastest SKUs
this number of pallets deep
is ideal
For your bottom SKUs
this number of pallets deep
is ideal
For your slowest moving SKUs, if the quantity is less than a full pallet, shelving or pick media is recommended.

Contact Us

To determine the best solutions for SKU storage and handling, contact us today. 

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