The ABC approach to inventory management divides inventory into
A)several categories based on first-in, first-out basis.
B)several categories based on last-in, first-out basis.
C)several categories based on overall level of importance and profitability.
D)several categories based on overall type of product.

Question

Quizplus · Accepted Answer

The ABC approach to inventory management categorizes inventory based on their overall level of importance and profitability. This helps businesses to prioritize their inventory management efforts, focus on the most important and profitable items, and minimize the risk of stockouts or overstocking. The categories are usually designated as A, B, and C, with A items being the most important and profitable, and C items being the least. This approach is more effective than the other options listed because it allows for a more strategic and nuanced approach to inventory management.

The ABC Approach to Inventory Management Divides Inventory into