The ABC Method of Inventory Management Is Founded on the Notion

question 96

Multiple Choice

The ABC method of inventory management is founded on the notion that

• A)some inputs are more valuable or more critical to the firm's operations than others.
• B)inventory costs should be cut to an absolute minimum by reducing inventory on hand.
• C)a firm should know its economic order quantity at all times.
• D)the cost of placing an order is a fixed cost.

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Definitions:

Facilitating Function

Activities that assist in the movement of goods from the producer to the consumer, including transportation, storage, and financial services.

Channel Intermediaries

Organizations or individuals that act as middlemen in the distribution process, helping to move products from the manufacturer to the consumer.

Direct Channel

A method of distribution where a company sells its products or services directly to consumers without the use of intermediaries.

Producers

Entities or individuals that create, manufacture, or supply goods and services for consumption by consumers or other businesses.