Asked by Michelle Uzoukwu on Jun 21, 2024
Verified
Strategies for managing "C" items in ABC analysis are:
A) review inventory levels frequently.
B) carrying inventories.
C) concentrating requirements with one or a few suppliers.
D) review inventory levels frequently and carrying inventories.
E) carrying inventories and concentrating requirements with one or a few suppliers.
ABC Analysis
An inventory categorization technique that divides items into three categories, A, B, and C, based on their value to the company, to optimize inventory management.
Inventory Levels
The quantity of stock on hand at any given time, which companies manage to meet customer demand without incurring unnecessary costs or losses.
- Understand the techniques for inventory management utilizing ABC analysis.
Verified Answer
NK
navdeep kaur123Jun 23, 2024
Final Answer :
E
Explanation :
"C" items in ABC analysis are typically low-cost items that account for a large percentage of inventory items but a small percentage of inventory value. Managing these items often involves carrying inventories to ensure availability and concentrating requirements with one or a few suppliers to simplify procurement and potentially leverage better pricing or terms due to higher volumes.
Learning Objectives
- Understand the techniques for inventory management utilizing ABC analysis.