Skip to content

CA Intermediate · Financial Management and Strategic Management · Management of Inventory

In ABC analysis of inventory control, items that form a small percentage of the number of items but a large percentage of total inventory value are called:

Such items are A items. They are few in number but make up most of the inventory value, so they receive tight control with frequent review, accurate records and careful ordering. C items are the opposite, and need only simple controls.

  1. AC items, needing minimum control
  2. BA items, needing tight controlCorrect
  3. CB items, needing no control
  4. DBuffer items, needing periodic review only

Explanation

A items are few in number but account for the bulk of value, so they need close monitoring, frequent review and tight control. C items are many in number but low in value and need simple controls.

Did you get it right without looking?

One question tells you little. A timed set on Management of Inventory shows your real accuracy, how long you take and where you lose marks.

Practise Management of InventoryFree diagnostic mock

More Management of Inventory questions