Questions: Which of the following inventory classifications is more likely to be handled using a continuous review system? A. C-items B. B-items C. A-items

Which of the following inventory classifications is more likely to be handled using a continuous review system? A. C-items B. B-items C. A-items

Transcript text: Which of the following inventory classifications is more likely to be handled using a continuous review system? A. C-items B. B-items c. A- items

Solution

The answer is C: A-items.

Explanation:

A-items are typically high-value items with a significant impact on overall inventory costs. They are often managed using a continuous review system because:

High Value: A-items represent a large portion of the inventory value, so maintaining optimal stock levels is crucial.
Frequent Monitoring: Continuous review allows for real-time monitoring and quick response to changes in demand or supply.
Cost Efficiency: Ensures that stockouts or overstock situations are minimized, which is important for high-value items.

Incorrect Options:

A. C-items: These are low-value items and are usually managed with a periodic review system due to their lower impact on overall costs.

B. B-items: These are mid-value items and might be managed with either system, but they are less critical than A-items.

In summary, A-items are best suited for a continuous review system due to their high value and the need for precise inventory control.

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