If you analyze what sells the most and what cost the most, a predictable pattern will emerge with most distribution inventories.ertain items are demanded by a great many customers.Most items are only demanded by certain customers.Some items are demanded by few customers.s a result of this general pattern, a small percentage of the total item usage accounts for a large proportion of total usage value. It is hypothesized that ____ percent of the total inventory cost is vested in approximately ____ percent of the items.
A) 60 /40
B) 20 / 80
C) 80 / 20
D) 50 / 50
E) 70 / 30

Question

Quizplus · Accepted Answer

This pattern is commonly known as the Pareto Principle or the 80/20 rule, which states that approximately 80% of effects come from 20% of causes. In this case, it is hypothesized that approximately 80% of the inventory cost is vested in approximately 20% of the items, which is a common pattern in most distribution inventories. Therefore, option C) is the best choice.

If You Analyze What Sells the Most and What Cost