Author Question: ABC analysis is based upon the principle that (Read 35 times)

OSWALD · **on:** Dec 3, 2019

Question 1

All of the following statements about ABC analysis are true except
◦ it categorizes on-hand inventory into three groups based on annual dollar volume.
◦ it states that there are the critical few and the trivial many inventory items.
◦ it states that all items require the same degree of control.
◦ it is an application of the Pareto principle.
◦ inventory may be categorized by measures other than dollar volume.

Question 2

ABC analysis is based upon the principle that
◦ more time should be spent on class "C" items because there are more of them.
◦ an item is critical if its usage is high.
◦ all items in inventory must be monitored very closely.
◦ as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items.
◦ there are usually a few critical items, and many items which are less critical.

Juro · **Reply #1 on:** Dec 3, 2019

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