ABC inventory systems are based on the concept that all items kept in inventory are equally important.

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ABC inventory systems are based on the concept that not all items kept in inventory are equally important, and therefore they should be classified and managed differently. The system categorizes items into three groups (A, B, and C) based on their level of importance, in terms of usage value, cost, and criticality. Group A items are the most important and usually have a higher value, while Group C items are the least important and have a lower value. Inventory management strategies are then tailored to each group to optimize costs, minimize stockouts, and maximize profits.

ABC Inventory Systems Are Based on the Concept That All