Which of the Following Statements About ABC Analysis Is False

question 87

Multiple Choice

Which of the following statements about ABC analysis is false?

• A) ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings.
• B) In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers.
• C) In ABC analysis, "C" Items have minimal records, periodic review, and simple controls.
• D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
• E) In ABC analysis, "B" items are not as tightly controlled as "A" items.

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Definitions:

Demand

The desire of purchasers, consumers, clients, or employers, backed by the ability and willingness to pay for a particular commodity or service.

Consumer Income

The total amount of income earned by consumers, influencing their purchasing power and demand for goods and services in the economy.

Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product demanded at those prices.

Quantity Demanded

Quantity demanded is the total amount of a good or service that consumers are willing and able to purchase at a given price in a specified period.