What inventory management classification divides items into three categories based on their annual dollar volume usage to optimize control efforts?

Explanation

• ABC Analysis categorizes inventory based on Pareto’s Principle (80/20 rule):
• Category A: High monetary value (15-20% items, 70-80% value) – strict control.
• Category B: Moderate monetary value (30% items, 15-20% value) – moderate control.
• Category C: Low monetary value (50% items, 5-10% value) – minimal control.