Question

In A-B-C inventory control technique, the maximum attention is given to the items which

• A. consume more time to get supply
• B. having more annual consumption value
• C. are perishable in nature
• D. are surplus

Hint:

Focus on A items first, as they consume more resources and have a higher impact on total inventory costs.

Answer 1

The Correct Option is B

• The A-B-C inventory control technique is based on the classification of inventory items according to their annual consumption value.
• The classification is as follows:
  • A items are the high-value items with low frequency of use (typically consuming a large part of total consumption value).
  • B items are medium-value items with moderate consumption.
  • C items are low-value items with high frequency of use.
• Maximum attention is given to A items because these items contribute significantly to the overall consumption value and therefore have a greater impact on inventory costs.