Practice Test Geeks(CIM) Certified Inventory Manager Practice Test
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ABC Analysis & Classification Flashcards

7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 ABC Analysis & Classification flashcards as text

  1. When applying ABC analysis to spare parts inventory, which additional factor beyond dollar usage is most critical?

    Answer: Equipment downtime risk if the part is unavailable

    For spare parts, equipment downtime risk (criticality) must supplement dollar usage to ensure operationally vital parts receive adequate stock coverage.

  2. A buyer manages 1,000 SKUs. After ABC analysis, she dedicates 80% of her purchasing time to Class A items. This approach is best described as:

    Answer: Selective inventory control

    ABC analysis enables selective inventory control by directing disproportionate management effort toward the highest-value items.

  3. How often should ABC classifications typically be reviewed and updated?

    Answer: Periodically (e.g., annually or when demand patterns change significantly)

    ABC classifications should be reviewed periodically — commonly annually — or whenever significant changes in demand, price, or product mix occur.

  4. A firm uses multi-criteria ABC analysis combining annual value and lead time. An item with low annual value but a 16-week lead time would likely be reclassified from C to:

    Answer: Class A

    Long lead times increase supply risk significantly, and multi-criteria analysis can elevate such items to Class A for tighter management.

  5. In ABC analysis, which class typically has the highest reorder point (ROP) relative to its consumption rate?

    Answer: Class A

    Class A items, due to their high value and tight control requirements, are often managed with higher reorder points to minimize stockout risk.

  6. Which graphical tool is most commonly used to visualize the cumulative value distribution in ABC analysis?

    Answer: Lorenz curve / ABC curve

    A Lorenz curve (or ABC cumulative curve) plots cumulative percentage of SKUs against cumulative percentage of value to reveal classification boundaries.

  7. A company with 500 SKUs performs ABC analysis. Class A = 25 items, Class B = 100 items, Class C = 375 items. What percentage of SKUs are Class A?

    Answer: 5%

    25 Class A items out of 500 total SKUs equals 5%, which aligns with the typical Pareto-based ABC distribution.