In the ABC system of inventory management, the __________method or system could be utilized to control C items.
A) red-line
B) basic economic order quantity
C) just-in-time
D) materials requirement planning

Question

Quizplus · Accepted Answer

The ABC system of inventory management categorizes inventory into three groups based on their value or importance - A, B, and C. C items are the least valuable or important items in terms of cost or usage. Red-line method is commonly used for controlling C items in inventory management. In this method, a line is drawn on the inventory card to indicate the level at which the item needs to be reordered. Once the inventory level reaches the red-line, a replenishment order is placed to avoid stockouts. This method is simple and cost-effective for managing inventory of low-value items. Option B) Economic Order Quantity (EOQ) is a method used to calculate the optimum order quantity for inventory items, which is more suited for managing A and B items. Option C) Just-in-Time (JIT) is a lean production technique that aims to minimize inventory levels, which may not be suitable for managing inventory of low-value C items. Option D) Material Requirements Planning (MRP) is a computer-based inventory management system that plans and controls material flow based on demand, which is more suitable for managing A and B items.

In the ABC System of Inventory Management, the __________Method or System