Upon graduation with your finance degree, you take a position with a medium-sized manufacturing concern. You find that there are several pieces of inventory required in the manufacturing process that make up a small percentage of physical inventory, but a large percentage of inventory value. Anxious to impress your boss, you suggest the firm use the ______________ of inventory management.

Question

Quizplus · Accepted Answer

The ABC model of inventory management is the correct choice because it categorizes inventory into three classes (A, B, and C) based on its value and frequency of use. Items that make up a small percentage of physical inventory but a large percentage of inventory value would be classified as 'A' items, which require more focused management. This approach helps in optimizing inventory management by focusing on the most valuable items.

Upon Graduation with Your Finance Degree, You Take a Position