# SKU Grading

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**Quick Answer:** SKU Grading assigns a performance tier — A, B, or C — to each product variant in your catalog. Grades help you filter the Production Plan to focus on priority SKUs, and Mo uses them to calibrate demand projections.
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**SKU Grading is** a classification system that ranks each product variant by performance relative to the rest of your catalog. Every SKU receives a letter grade (A, B, or C) that reflects how it compares to your other items. This lets planners focus time and inventory resources on the products that matter most.

## What Are the Grade Tiers?

| Grade    | Meaning                 | Effect on Mo's Demand Projections |
| -------- | ----------------------- | --------------------------------- |
| **A**    | Highest-performing SKUs | Increased projections             |
| **B**    | Mid-tier SKUs           | Moderate projections              |
| **C**    | Lowest-performing SKUs  | Reduced projections               |
| **None** | Not yet graded          | No grade-based adjustment         |

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Grades are based on **ABC Analysis** — an industry-standard framework rooted in the Pareto principle, where roughly 20% of SKUs typically drive 80% of revenue. A = top performers, B = middle tier, C = bottom tier.
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## Where Do Grades Appear in Moselle?

Grades are used in two places:

**Production Plan** The primary place grades are visible. Use the grade filter to narrow the Production Plan table to only A, B, C, or ungraded SKUs. This helps planners focus on high-priority items without scrolling through the entire catalog.

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**Note:** Grades are not displayed as a visible column in the Production Plan table. They are used for filtering only.
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**Mo AI Chat** Mo understands SKU grades and uses them when reasoning about forecasts and demand planning. When you ask Mo about a SKU, grade context influences how it interprets and adjusts projections.

## How to Filter by Grade in the Production Plan

1. Navigate to **Replenishment** in the left sidebar
2. Open your **Production Plan**
3. Click the **filter** controls at the top of the table
4. Select **Grade** and choose one or more tiers (A, B, C, or None)
5. The table updates to show only matching SKUs

## Key Definitions

**SKU (Stock Keeping Unit)** : A unique identifier for a specific product variant. "Red Hoodie, Size L" and "Red Hoodie, Size M" are two different SKUs.

**SKU Grading** : The process of assigning a performance tier (A, B, or C) to each SKU based on how it compares to the rest of your product catalog.

**ABC Analysis** : The industry framework behind SKU grading. Classifies inventory into three categories — A (top performers), B (middle), C (bottom) — to help planners prioritize resources.

**Grade Filter** : A filter control in the Production Plan that narrows the table to show only SKUs of a selected grade tier.

**Demand Projection** : A forecast of how many units of a SKU will be sold in a future period. Mo adjusts projections up or down based on a SKU's grade.

## Frequently Asked Questions

### How are grades assigned?

Grades are calculated automatically by Moselle based on each SKU's performance relative to the rest of your catalog. You do not need to assign grades manually.

### Can I change a SKU's grade?

Grades are determined by Moselle based on catalog-wide performance data and are not manually editable.

### Why does a SKU show "None" for its grade?

A grade of **None** means the SKU has not yet been graded — typically because it lacks sufficient sales history. No grade-based adjustment is applied to these items.

### Do grades affect anything other than the Production Plan filter?

Yes — Mo uses grade context when generating and adjusting demand forecasts in AI chat. Higher-graded SKUs receive increased demand projections; lower-graded ones receive reduced projections.

## Related Guides

{% content-ref url="../../planning-and-execution/replenishment/production-planning" %}
[production-planning](https://learn.moselle.io/planning-and-execution/replenishment/production-planning)
{% endcontent-ref %}

{% content-ref url="../../planning-and-execution/forecasting/build-your-forecast-with-mo" %}
[build-your-forecast-with-mo](https://learn.moselle.io/planning-and-execution/forecasting/build-your-forecast-with-mo)
{% endcontent-ref %}

{% content-ref url="access-your-catalog" %}
[access-your-catalog](https://learn.moselle.io/operations/catalog/access-your-catalog)
{% endcontent-ref %}