Question

Which of the following is not the technique of management and control of inventories?

• A. ABC analysis
• B. VED analysis
• C. Economic order quantity
• D. BCG analysis

Hint:

Associate techniques with their purpose:

\textbf{ABC/VED/EOQ} $\rightarrow$ Managing \textbf{Items} in a warehouse.
\textbf{BCG Matrix} $\rightarrow$ Managing \textbf{Businesses} in a corporate portfolio.

Answer 1

The Correct Option is D

Step 1: Define each of the listed analysis techniques. Step 1:

ABC analysis: An inventory categorization method where items are divided into three categories (A, B, C) based on their consumption value. 'A' items are high-value, 'C' items are low-value. This is a core inventory control technique.
VED analysis: An inventory categorization method used mainly for spare parts, classifying items based on their criticality: Vital, Essential, Desirable. This is an inventory control technique.
Economic Order Quantity (EOQ): A formula used to determine the optimal quantity of inventory to order that minimizes total inventory costs (holding costs + ordering costs). This is a fundamental inventory management tool.
BCG analysis (BCG Matrix): Developed by the Boston Consulting Group, this is a corporate strategy tool used to analyze a company's business units or product lines based on their market growth rate and relative market share. They are categorized as Stars, Question Marks, Cash Cows, or Dogs.
Step 2: Identify the technique that does not relate to inventory management.
Step 2: ABC, VED, and EOQ are all directly related to the management and control of inventory items. BCG analysis, however, is a high-level strategic planning tool for portfolios of businesses or products, not for managing stock levels.