BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Consumption/ usage value
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Availability of the resource
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Value of the item in store
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Cost of the item
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Detailed explanation-1: -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. Inventory control and management are critical for a business.
Detailed explanation-2: -ABC classification is a ranking system for identifying and grouping items in terms of how useful they are for achieving business goals. ABC classification is closely associated with the 80/20 rule, a business metric that proposes 80% of the outcomes are determined by 20% of the inputs.
Detailed explanation-3: -Inventory items are classified based on their annual usage value in monetary terms. Class A-item: 10 % of the item accounts 75% costs. Class B-item: 20% of the item accounts 15% costs. Class C-item: 70% of the item accounts 10% costs.