Question 39 of 78
Q.Explain ABC analysis system of inventory control.
ChseodishaCHSE Odisha Plus Two (Class 12) Commerce Board 2020Subjective· 3mImportance★★★★★est
50% · 39/78 Questions
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →ABC analysis grades materials A/B/C by value so control effort is focused on high-value items.
ABC analysis (Always Better Control) is a technique of selective inventory control based on the principle that a small number of items usually account for a large share of total material value. Materials are divided into three categories:
| Category | Share of items (approx.) | Share of value (approx.) | Degree of control |
|---|---|---|---|
| A | ~10% | ~70% | Very strict - close watch, low stock, frequent ordering |
| B | ~20% | ~20% | Moderate control |
| C | ~70% | ~10% | Loose/simple control, larger safety stock |
Advantages
- Scarce management time and money are concentrated on the high-value A items.
- Investment in inventory is reduced without risking stock-outs of important items. …
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.