In the Context of ABC Inventory Analysis, Which of the Following

question 26

Multiple Choice

In the context of ABC inventory analysis, which of the following statements is true of class C items

• A) They require close control by operations managers.
• B) They comprise more than 80 percent of the total dollar usage.
• C) They can be managed using automated computer systems.
• D) They make up less than 10 percent of inventory items.

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Definitions:

Constrained Resource

A limited resource within a system that significantly affects the throughput or output of the system.

Special Order

A special order refers to a one-time purchase order often at a discounted price, usually for large quantities that is outside the normal scope of operations.

Direct Labor Hours

Total working hours logged by employees who are intimately involved with the production operations.

Profitable Use

The utilization of resources or assets in a manner that generates a significant positive return or profit.