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The sequence number is one of the 4 different ways to implement a cutoff points for assigning items.
e.g. if you have 1000 items and you have defined 3 classes A, B and C.
If you look at the ABC descending value report, you can see a sequence number for each item.
The sequence number on the Assign Items screen refers to the last item to be included in that ABC class.
e.g. if you enter 100 in front of A, then the Assign items screen will assign the first 100 items to Class A.
If you choose to use a different method to assign items, then Oracle will calculate the sequence number for each class automatically.
Hope this answers your question