CIM ABC Analysis & Classification 5

Question 1

Which inventory control system is most compatible with Class A item management under ABC analysis?

Accepted Answer

Continuous review (Q) system with fixed reorder point

Answer

Class A items warrant a continuous review system so that inventory levels are monitored constantly and replenishment is triggered at a precise reorder point.

Question 2

ABCD analysis extends traditional ABC by adding a 'D' category. What do 'D' items typically represent?

Accepted Answer

Dead stock or obsolete items with zero or near-zero movement

Answer

In ABCD analysis, 'D' items are dead or dormant stock — items with no or negligible movement that may need liquidation or disposal.

Question 3

A purchasing manager wants to reduce the number of active suppliers. Which ABC class should she target first for supplier consolidation?

Accepted Answer

Class C — low-value items with many small suppliers are easy targets

Answer

Class C items often involve numerous small purchases from many suppliers, making them prime candidates for consolidation to reduce transaction costs.

Question 4

When ABC analysis is combined with XYZ analysis, what does the 'XYZ' dimension measure?

Accepted Answer

Demand variability (X=stable, Y=variable, Z=highly irregular)

Answer

XYZ analysis classifies items by demand variability: X items have stable demand, Y items have moderate variability, and Z items have highly irregular demand.

Question 5

An AX item (Class A value + X demand stability) should be managed with which strategy?

Accepted Answer

Lean, precise replenishment leveraging stable demand forecasts

Answer

AX items are high-value with stable demand, enabling lean replenishment with accurate forecasts and low safety stock requirements.

(CIM) Certified Inventory Manager Practice Test

(CIM) Certified Inventory Manager Practice Test

CIM ABC Analysis & Classification 5