Question
What is ABC analysis?

Answer

In ABC (Always Better Control) analysis, a company classifies all its inventory in three groups 'A', 'B' and 'C'. 'A' group contains inventory which is 70-80% in terms of value, but only 10-20% in terms of quantity. 'B' group contains inventory which is 10-20% in terms of value and 15-25% in terms of quantity. 'C' group contains inventory which is 5-10% in terms of value and 65-75% in terms of quantity.

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