Question

____________ is a technique of stock control which led to greater efficiency of the management because attention is required to be paid only to some of the items rather than on all the items.

• A. ABC Analysis
• B. JIT inventory system
• C. VED Analysis
• D. Perpetual Inventory System

Answer 1

Answer: (A)

ABC Analysis

Inventory is categorized as A, B and C based on their importance in terms of value not the quantity. A category recognizes those items which are having 70-80% of the value of inventory but only 10-20% of the quantity. Reverse is the case for C category items where value is only 10-20% of the inventory but these are 70-80% in terms of inventory quantity.

This technique of stock control is used to allow management to review only "A" category items so that time of management can be saved.

VED Analysis :- It attempts to classify the items used into three broad categories, namely Vital, Essential, and Desirable. The analysis classifies items on the basis of their criticality for the industry or company.

Just-in-time also known as JIT is an inventory management method whereby labour, material and goods (to be used in manufacturing) are re-filled or scheduled to arrive exactly when needed in the manufacturing process.

A perpetual inventory system, or continuous inventory system, is an inventory control system that allows businesses to keep a real-time account of inventory on hand.