CIM ABC Analysis & Classification 4

Question 1

ABC analysis is most closely related to which broader inventory management principle?

Accepted Answer

Selective inventory control based on Pareto analysis

Answer

ABC analysis is a direct application of Pareto analysis (the 80/20 rule) to selective inventory control.

Question 2

Which ordering policy is most appropriate for Class A items in ABC analysis?

Accepted Answer

Frequent orders in smaller quantities with tight monitoring

Answer

Class A items benefit from frequent, smaller orders and continuous monitoring to minimize capital tied up and reduce stockout risk.

Question 3

A retail chain wants to optimize shelf space allocation. How can ABC analysis assist?

Accepted Answer

By identifying high-value items that deserve prime shelf positioning

Answer

ABC analysis identifies the highest-value (Class A) products that should receive prime, easily accessible shelf locations to maximize sales.

Question 4

An inventory analyst notices that ABC class boundaries shifted significantly after a product line was discontinued. What should she do?

Accepted Answer

Recalculate annual dollar usage and reclassify all items

Answer

Significant changes in the product portfolio require a full recalculation and reclassification to ensure ABC categories remain meaningful.

Question 5

Which statement about Class B items in ABC analysis is most accurate?

Accepted Answer

They represent a middle tier and are managed with moderate controls

Answer

Class B items occupy a middle ground, requiring moderate management attention and standard control procedures.

(CIM) Certified Inventory Manager Practice Test