The ABC approach to inventory management is based on the concept that:
A)inventory should arrive just in time to be used.
B)the inventory period should be constant for all inventory items.
C)basic inventory items that are essential to production and also inexpensive should be ordered in small quantities only.
D)a small percentage of the inventory items probably represents a large percentage of the inventory cost.
E)one-third of a year's inventory need should be on hand, another third should be on order, and the last third should not be ordered yet.

Question

Quizplus · Accepted Answer

The ABC approach to inventory management is based on the concept that a small percentage of the inventory items probably represents a large percentage of the inventory cost. This means that special attention should be given to the management of the high-value items, rather than treating all inventory items equally. The approach involves categorizing inventory items based on their value and focusing on managing the high-value items more closely. This can help to reduce inventory costs and improve overall efficiency.

The ABC Approach to Inventory Management Is Based on the Concept