Asked by
reiona grass
on Nov 07, 2024
Verified
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 in the order process and the last third should not be ordered yet.
ABC Approach
A methodology used in inventory management and cost accounting that identifies and classifies items in order of importance, with A items being the most valuable.
Inventory Management
The process of ordering, storing, and using a company's inventory, including the management of raw materials, components, and finished products.
Inventory Cost
The total cost associated with holding and managing inventory, including purchase, storage, and obsolescence costs.
- Gain insight into methods of inventory control and their financial effects.
Verified Answer
PL
Learning Objectives
- Gain insight into methods of inventory control and their financial effects.