BUISENESS MANAGEMENT
INVENTORY CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The “C” items are of moderate dollar value
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You should allocate about 15 % of the dollar volume to “B” items
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The “A” items are of low dollar value
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The “A” items are of high dollar value
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Detailed explanation-1: -The ABC analysis divides inventory into three categories, with “A” items being the most important and “C” items being the least important. The ABC analysis can be used to help make decisions about which inventory items should be given priority in terms of stock levels and reordering.
Detailed explanation-2: -ABC (Always Better Control) analysis is one of the most commonly used inventory management methods. ABC analysis groups items into three categories (A, B, and C) based on their level of value within a business.
Detailed explanation-3: -’A’ items – 80% of the annual inventory value of your items (likely made up of just 20% of your items) ‘B’ items – 15% of the annual inventory value of your items (likely made up of 30% of your items) ‘C’ items – 5% of the annual inventory value of your items (likely made up of 50% of your items)
Detailed explanation-4: -ABC analysis is a method in which inventory is divided into three categories, i.e. A, B, and C in descending value. The items in the A category have the highest value, B category items are of lower value than A, and C category items have the lowest value.