____ recognizes that all inventories are not of equal value to a firm and thus all inventories should not be managed in the same way.
A)Vendor-managed inventory
B)Suboptimization
C)Marginal analysis
D)ABC analysis of inventory

Question

Quizplus · Accepted Answer

ABC analysis of inventory recognizes that different items in inventory have different levels of importance or value to the organization. This technique categorizes items into three groups (A, B, and C) based on their relative value and establishes different inventory control approaches for each group. Items that make up the largest percentage of inventory value (A-items) are closely monitored and managed, while items that make up the smallest percentage of inventory value (C-items) may be managed with less attention.

____ Recognizes That All Inventories Are Not of Equal Value