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ABC analysis divides on-hand inventory into three classes, generally based on
- a)item quality
- b)unit price
- c)annual rupee volume
- d)the number of units on hand
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
ABC analysis divides on-hand inventory into three classes, generally b...
ABC analysis is a technique used in inventory management to categorize items based on their annual rupee volume. The three classes are:
1. Class A: These are high-value items that account for a significant portion of the annual rupee volume, typically around 80%. These items are critical to the business and require careful management to ensure that they are always available.
2. Class B: These are medium-value items that account for around 15% of the annual rupee volume. They are important but not critical to the business, and require less management than Class A items.
3. Class C: These are low-value items that account for the remaining 5% of the annual rupee volume. They are typically low-cost items that are readily available and require minimal management.
The purpose of ABC analysis is to help businesses prioritize their inventory management efforts. By focusing on the most important items, businesses can ensure that they always have the inventory they need to meet customer demand, while minimizing the cost of carrying excess inventory.
In practice, ABC analysis involves calculating the annual rupee volume for each item in inventory and then ranking them from highest to lowest. The items are then divided into the three classes based on their cumulative percentage of the annual rupee volume.
Overall, ABC analysis is a valuable tool for inventory management that can help businesses optimize their inventory levels and reduce costs.
1. Class A: These are high-value items that account for a significant portion of the annual rupee volume, typically around 80%. These items are critical to the business and require careful management to ensure that they are always available.
2. Class B: These are medium-value items that account for around 15% of the annual rupee volume. They are important but not critical to the business, and require less management than Class A items.
3. Class C: These are low-value items that account for the remaining 5% of the annual rupee volume. They are typically low-cost items that are readily available and require minimal management.
The purpose of ABC analysis is to help businesses prioritize their inventory management efforts. By focusing on the most important items, businesses can ensure that they always have the inventory they need to meet customer demand, while minimizing the cost of carrying excess inventory.
In practice, ABC analysis involves calculating the annual rupee volume for each item in inventory and then ranking them from highest to lowest. The items are then divided into the three classes based on their cumulative percentage of the annual rupee volume.
Overall, ABC analysis is a valuable tool for inventory management that can help businesses optimize their inventory levels and reduce costs.
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ABC analysis divides on-hand inventory into three classes, generally b...
In ABC Analysis the products are divided according to the major contribution of profit to the company
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ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer? for Mechanical Engineering 2025 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer?.
ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer? for Mechanical Engineering 2025 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC analysis divides on-hand inventory into three classes, generally based ona)item qualityb)unit pricec)annual rupee volumed)the number of units on handCorrect answer is option 'C'. Can you explain this answer?.
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