The Pareto principle is best applied to which of the following inventory systems?
A)EOQ
B)Fixed-time period
C)ABC classification
D)Fixed-order quantity
E)Optional replenishment system

Question

Quizplus · Accepted Answer

The Pareto principle, also known as the 80/20 rule, states that roughly 80% of the effects come from 20% of the causes. This principle can be applied to ABC classification, which prioritizes inventory items based on their value or impact on the organization. As per the Pareto principle, A class inventory items, which are typically the top 20% of the items by value, account for about 80% of the inventory costs or revenue. Therefore, focusing on managing the A items can have the most significant impact on overall inventory performance.

The Pareto Principle Is Best Applied to Which of the Following