Can somebody explain how ABC analysis is done ?

Hi Experts,
                     Can somebody explain how ABC analysis is done . If I use MC40 transaction there I have 4option but I can use either one of those . For second option , Usage value as number we can directly specify cost and accordingly system will classify materials In A, B and C category .
I have question on 1st 3 rd and 4 th option . How system will classify materials if These option is used .
Please explain with examples .
Points will be rewarded .
Thanks in advance !
Neal

Hi Sir ,
                 Thanks again , I would explain what I have understood .
MC 40 . Option selected is Usage value with value put are 70 , 20 , and 10 .
Suppose I have 3 mat in plant
              Stock         Value
1) X        100 kg      1000   ( for 1 kg from MM)
2) Y          20 PC      2300 
3) Z          30  lt      40000
Now how would system classify these items ? Will it consider price or only consumption /qty ? or both ?
Please explain with the same figures . Again the 90 days period you said , is it taken automatically ? because on this T code there is no option for entering time period .
Neal

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