Dynamic ABC Segmentation
ABC segmentation, based on the Pareto principle (80/20 rule), helps organizations optimize resources, cut costs, and improve decision-making by prioritizing high-value items like products or customers. This Power BI Dynamic ABC Segmentation report classifies articles into three categories based on revenue contribution:
- A: High-revenue articles (e.g., ~70% of total revenue)
- B: Medium-revenue articles (e.g., ~20% of total revenue)
- C: Low-revenue articles (e.g., ~10% of total revenue).
Unlike static models, this solution is flexible and dynamic. A What-If Parameter slicer allows users to adjust thresholds (e.g., 80/15/5 instead of 70/20/10), and the segmentation adapts to filters like time period, business segment, or country for relevant insights.
The core challenge was creating a Cumulative_Sales measure that calculates a running total from the highest-revenue article to the current one within the filter context. This is achieved using DAX functions:
- WINDOW(): Defines a row range from the first article to the current row.
- REL(): Sets the window’s end relative to the current row
- ALLSELECTED(): Respects filters (e.g., period or segment)
- ORDERBY(): Sorts articles by revenue in descending order.
The DAX formula computes Cumulative_Sales, followed by measures for Cumulative_Share and ABC_Dynamic based on user-defined thresholds.
For an alternative approach to a ABC segmentation, see SQLBI’s blog post.
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