Some companies that have a lot of different types of items (with different costs as well) like to rank their items to understand which items within inventory represent the greatest portion of inventory costs.  A common way of ranking items is by using the ABC method (Pareto).  This posting focuses on inventory value as the basis for ranking, but as companies get used to the concept, they tend to develop their own equations to determine the ranking.  Companies also use the ABC ranking to analyze sales figures as well, but that will be saved for another post.