ABC analysis is an item classification system which (indicate the exception belo
ID: 383030 • Letter: A
Question
ABC analysis is an item classification system which (indicate the exception below):
can be used as guide for allocating time and attention in inventory management.
identifies the A items as primarily materials and parts that account for the highest percentage of annual dollar value.
can be used as a guide for establishing controls in inventory management.
would guide inventory management to concentrate their time and effort on supply type items.
none of the above is an exception.
A.can be used as guide for allocating time and attention in inventory management.
B.identifies the A items as primarily materials and parts that account for the highest percentage of annual dollar value.
C.can be used as a guide for establishing controls in inventory management.
D.would guide inventory management to concentrate their time and effort on supply type items.
E.none of the above is an exception.
Explanation / Answer
ABC analysis classifies the items in an inventory into 3 categories and prioritises them which helps in maintaing a balance in inventory management. This analysis helps in maintaining time and accuracy of the inventory. But it has some exceptions like short life products, lead time not specified etc., In these exceptions this analysis is not applicable. So it is not alsways possible to guide the inventory management to concentrate their time and effort on supply type items. Hence the answer is D.