Supply Chain Management Professional (SCMP) · Question
In inventory management, what does ABC analysis primarily categorize items by?
ABC analysis classifies inventory items based on their annual consumption value, allowing for differentiated management efforts.
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Question: In inventory management, what does ABC analysis primarily categorize items by?
Answer options:
- Their physical size and weight
- Their unit cost and lead time ✅ Their annual consumption value
- Their storage location complexity
Correct answer: Their annual consumption value
Explanation: ABC analysis classifies inventory items based on their annual consumption value, allowing for differentiated management efforts.
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