The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as A items and low-cost items classified as C items.

Question

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The A-B-C approach classifies inventory items based on their importance, often determined by annual consumption value, not just unit cost. A items are the most valuable, B items are of moderate value, and C items are the least valuable.

The A-B-C Approach Involves Classifying Inventory Items by Unit Cost