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.

---

Definitions:

Illumination

Refers to the quality or state of being lit or the process of illuminating a specific area, often used metaphorically to mean clarifying or enlightening an issue or topic.

Keenness of Insight

The ability to see or understand things clearly and deeply, often leading to intuitive judgments.

Fortunate Accident

An unexpected event that leads to a positive outcome or benefit, often playing a valuable role in discoveries and innovations.

Creativity

The ability to generate novel and valuable ideas, solutions, or works that are original and imaginative.