ABC analysis of inventory:
A)Applies activity-based costing to managing inventory
B)Recognizes that inventories are not of equal value to a firm
C)Is synonymous with vendor-managed inventory
D)Is an alternative to the EOQ model

Question

Quizplus · Accepted Answer

The ABC analysis of inventory recognizes that inventories are not of equal value to a firm and categorizes items into three groups - A, B, and C based on their importance and value to the business. This allows companies to prioritize inventory management and allocation resources where they are most needed. Options A, C, and D are not accurate definitions of ABC analysis of inventory.

ABC Analysis of Inventory