Which of the following statements about ABC analysis is false?
A) ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings.
B) In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers.
C) In ABC analysis, "C" Items have minimal records, periodic review, and simple controls.
D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
E) In ABC analysis, "B" items are not as tightly controlled as "A" items.

Question

Quizplus · Accepted Answer

Option D is the false statement. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings, but it does not imply that all items must be tightly controlled. Instead, it classifies items into three categories, depending on their importance, and applies different levels of control to each category.

Which of the Following Statements About ABC Analysis Is False