For instance, you might band items as follows:
- Annual Sales of $100,000 or Greater.
- Annual Sales of $10,000 to $99,999.
- Annual Sales of less than $10,000.
Then, measure the survival of items within each band.
- $100,000+ Survival Probability = 88%.
- $10,000 - $99,999 Survival Probability = 46%.
- $1 - $9,999 Survival Probability = 23%.
You've got interesting information, now.
Ask your merchandising team why 12% of high-selling items were discontinued.
Ask your merchandising team why 23% of low-selling items were carried forward.