Question

________ is used primarily for control of spare parts.

• A. ABC analysis
• B. JIT inventory system
• C. VED analysis
• D. Perpetual inventory system

Answer 1

The correct option is C VED analysis

• VED analysis is used to classify the inventory in to three broad categories i.e. Vital, Essential and Desirable. This classification is based on the criticality of the inventory item. This is primarily used for control on spare parts.
• 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.
  

• ABC analysis is a type of inventory categorization method in which inventory is divided into three categories, A, B, and C, in descending value. A has the highest value items, B is lower value than A, and C has the lowest value.
• 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.