ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The 80/20 inventory rule states that:
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80% of sales for a business come from 20% of its inventory
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80% of inventory for a business comes from 20% of its sales
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -The 80/20 rule, also known as the Pareto Principle, states that 80% of results come from 20% of causes. Therefore, you need to identify and prioritize the 20% of factors that produce the highest outcomes. In inventory, the rule suggests that 20% of your inventory accounts for 80% of your profit.
Detailed explanation-2: -In marketing, the Pareto principle says that 80 percent of your sales are represented by 20 percent of your customers. If companies break free from this, they will increase profits.
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