Question

Abc analysis is an item classification system which (indicate the exception below):

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.

Answer 1

Answer will be: E (none of the above)

Explanation: ABC analysis is an inventory categorization technique which consists of dividing inventory into 3 main categories (i.e.: A, B and C) among which A is the most important category and C being the least important. In the above question, all of the statements apply to the ABC analysis. They all are the characteristics of the analysis hence the answer will be E, none of the above

Answer 2

Abc analysis is an item classification system which consists in dividing items in three categories (A,B,C), A being the most valuable and C the least valuable.

A. It can be used as a guide for allocating time and attention in inventory management, since it's easier to go for the valuable items.

B. It can be used to identify A items as primarly materials and parts that account for the highest percentage of annual dollar value, as those would be the most valuable.

C. Can be used as a guide for establishing controls in inventory management, as by categorizing you have more control of the inventory.

D. It could be used for inventory management to concentrate their time and effort on specific supply type items depending of how valuable they are.

E. Since none of the above is an exception, the answer is E.