ABC analysis requires that inventory be classified according to:

Question

Quizplus · Accepted Answer

ABC analysis requires that inventory be classified according to annual dollar usage, also known as the value of the inventory. This helps to identify the most important items for the business and to prioritize accordingly. Option A (alphabetical order by item name) and option D (due date) are not relevant to ABC analysis. Option C (activity-based costs) may be important in other inventory management techniques, but not in ABC analysis. Option E (none of the above) is incorrect as option B is the correct answer.

ABC Analysis Requires That Inventory Be Classified According To