## HML Inventory Classification (High, Medium, Low Cost)
HML classifies items by the unit (individual item) cost — not by total consumption value (that's ABC) and not by usage (that's FSN).
| Category | Basis | Control focus |
|---|---|---|
| High cost | Individual item cost is high | Tight control and close monitoring needed. |
| Medium cost | Moderate cost items | Moderate attention given. |
| Low cost | Low-value items | Minimum control; managed in bulk. |
> HML vs ABC: ABC looks at annual consumption value (unit cost × quantity used). HML looks only at the per-unit price of the item. A cheap item consumed in huge volumes could be 'A' in ABC but 'L' in HML.