The correct answer is: ABC Analysis.
ABC Analysis is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.
In ABC Analysis, items are classified into three categories: A, B, and C. A-items are the most important items, accounting for a large percentage of the total value of inventory. B-items are less important items, accounting for a medium percentage of the total value of inventory. C-items are the least important items, accounting for a small percentage of the total value of inventory.
The ABC Analysis technique is based on the Pareto Principle, which states that 80% of the effects come from 20% of the causes. In the context of inventory management, this means that 80% of the value of inventory comes from 20% of the items.
By classifying items into A, B, and C categories, managers can focus their attention on the most important items (A-items). This can save time and money, as managers do not need to spend time and money managing items that are not as important (B-items and C-items).
Here is a brief explanation of each option:
- A. ABC Analysis is a technique of stock control which leads to saving of time of the management because attention is required to be paid only to some of the items rather than on all the items.
- B. JIT Inventory System is a method of inventory management in which materials and components are delivered just as they are needed for production. This system can help to reduce inventory costs and improve efficiency.
- C. VED Analysis is a technique for classifying items in inventory according to their value, urgency, and criticality. This information can be used to develop a more efficient inventory management system.
- D. Perpetual Inventory System is a system of inventory management in which the inventory level is constantly updated. This can be done manually or by using a computer system.