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

In inventory control, FSN analysis classifies items of stock on the basis of which of the following?

FSN analysis classifies inventory by rate of movement or issue from stores, into fast-moving, slow-moving and non-moving items. It does not use value of consumption (ABC), criticality (VED) or procurement difficulty (SDE).

  1. AAnnual value of consumption of the item
  2. BCriticality of the item to production
  3. CRate of movement or issue of the item from storesCorrect
  4. DDifficulty of procuring the item from suppliers

Explanation

FSN stands for Fast-moving, Slow-moving and Non-moving items, so it groups stock by how frequently items are issued. Value of consumption is the basis of ABC analysis, criticality is VED analysis, and procurement difficulty is the basis of scarcity (SDE) analysis.

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