In an ABC system of inventory control,________ is (are)the measure of the relative importance of an item in the company's inventory.
A)dollar usage value
B)carrying costs
C)set-up costs
D)optimum inventory level

Question

Quizplus · Accepted Answer

In ABC system of inventory control, dollar usage value (also known as annual monetary volume) is used to categorize inventory items into three categories based on their relative importance. This measure takes into account both the unit cost and the average annual usage of each item in order to determine its relative importance to the company. Items with high dollar usage value (A category) are typically managed more closely than items with lower dollar usage values (B and C categories).

In an ABC System of Inventory Control,________ Is (Are)the Measure