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
Which inventory control system is most compatible with Class A item management under ABC analysis?
Answer: Continuous review (Q) system with fixed reorder point
Class A items warrant a continuous review system so that inventory levels are monitored constantly and replenishment is triggered at a precise reorder point.
ABCD analysis extends traditional ABC by adding a 'D' category. What do 'D' items typically represent?
Answer: Dead stock or obsolete items with zero or near-zero movement
In ABCD analysis, 'D' items are dead or dormant stock — items with no or negligible movement that may need liquidation or disposal.
A purchasing manager wants to reduce the number of active suppliers. Which ABC class should she target first for supplier consolidation?
Answer: Class C — low-value items with many small suppliers are easy targets
Class C items often involve numerous small purchases from many suppliers, making them prime candidates for consolidation to reduce transaction costs.
When ABC analysis is combined with XYZ analysis, what does the 'XYZ' dimension measure?
Answer: Demand variability (X=stable, Y=variable, Z=highly irregular)
XYZ analysis classifies items by demand variability: X items have stable demand, Y items have moderate variability, and Z items have highly irregular demand.
An AX item (Class A value + X demand stability) should be managed with which strategy?
Answer: Lean, precise replenishment leveraging stable demand forecasts
AX items are high-value with stable demand, enabling lean replenishment with accurate forecasts and low safety stock requirements.
Which department outside of inventory management most benefits from ABC classification data?
Answer: Accounts Payable / Finance — for prioritizing payment terms and cash flow
Finance and Accounts Payable can use ABC data to negotiate better payment terms for Class A high-value items and optimize working capital allocation.
A company transitions from a single ABC classification to a multi-criteria approach including value, lead time, and criticality. What is the expected outcome?
Answer: Some previously Class C items will be elevated due to criticality or long lead time
Multi-criteria ABC analysis typically elevates some low-value items to higher classes when they have long lead times or high operational criticality.