The ________ is a technique that divides inventory into three groups, according to dollar investment.
A) JIT system
B) ABC system
C) EOQ model
D) LIFO model

Question

Quizplus · Accepted Answer

The ABC system, or activity-based costing system, is the technique that divides inventory into three groups based on dollar investment. This allows for more effective inventory management by identifying which items are most critical for the business and should be closely monitored, versus those that are lower value and can be managed less rigorously. The other options listed (JIT system, EOQ model, LIFO model) are inventory management techniques, but do not specifically involve dividing inventory into groups based on dollar investment.

The ________ Is a Technique That Divides Inventory into Three