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

In the ABC system of inventory control, items forming about 70% of total stock value but only about 10% of the number of items are classified as:

Such items fall in Category A. ABC analysis classifies stock by value, and A items are a small share of the item count but a large share of total value, so they receive the closest control and review.

  1. ACategory ACorrect
  2. BCategory B
  3. CCategory C
  4. DCategory X

Explanation

ABC analysis ranks items by value. A items are few in number but account for the bulk of value, so they need tight control. C items are many but low in value.

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