CA Intermediate · Financial Management and Strategic Management · Management of Inventory
Under the ABC method of inventory control, which items are typically given the tightest control?
Under ABC analysis, the A category items, which are few in number but account for a large share of total inventory value, receive the tightest control. The many low-value C items need only simple, routine control.
- AItems with high consumption value but few in numberCorrect
- BItems with low value but large in number
- CItems that are slow moving regardless of value
- DItems with the shortest lead time
Explanation
ABC analysis classes A items as a small percentage of items accounting for a large share of total value, so they get strict control and frequent review. C items are numerous but low in value and need only simple control.
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