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Question
What is ABC analysis?
Solution
ABC analysis is an inventory categorization method which consists in dividing items into three categories (A, B, C):
- A being the most valuable items.
- B-items are the inter class items, with a medium consumption value.
- C being the least valuable ones.
This method aims to draw managers’ attention on the critical few (A-items) not on the trivial many (C-items).
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