The ABC method of inventory management is founded on the notion that:
A)some inputs are more valuable or more critical to the business's operations than others.
B)inventory costs should be cut to an absolute minimum by reducing inventory on hand.
C)a business should know its economic order quantity at all times.
D)the cost of placing an order is a fixed cost.

Question

Quizplus · Accepted Answer

The ABC method classifies inventory items into categories based on their relative importance or value to the business. This allows the business to prioritize its inventory management and focus on the items that are most critical to its operations. The method does not necessarily aim to reduce inventory costs to an absolute minimum, nor does it require knowledge of the economic order quantity or assume fixed costs for placing orders.

The ABC Method of Inventory Management Is Founded on the Notion