Explain the concept of ABC analysis as a technique of inventory control
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Answer:
The correct answer to this question is the inventory management technique of ABC analysis based on its significance to the company.
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Given - The concept of ABC analysis as a technique of inventory control.
To Find - Explain the concept of ABC analysis as a technique of inventory control.
The value of inventory items is calculated using the inventory management technique of ABC analysis based on their significance to the company. Inventory managers classify things into categories based on how ABC ranks them in terms of demand, cost, and risk information.
In the ABC analysis approach, inventory is split into three groups, A, B, and C, in order of decreasing value. The items in category A are the most valuable, followed by those in category B, which are less valuable than A, and those in category C, which are the least valuable. A business needs effective inventory management and control.
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