The ABC Classification System for inventory is an organizational method that allows businesses to categorize their products based on value. By assigning each product an A, B, or C letter grade, businesses can quickly and easily identify which products are more important to the success of their business. Grade A products are typically high-value items with a large impact on sales, while Grade B products may have a smaller impact but still play a crucial role in production. Grade C products have little to no impact on company revenue and profits. By implementing an ABC Classification System, businesses can more effectively manage their inventory and prioritize their limited resources according to the importance of each product.