The correct answer is D. All of the above.
ABC analysis is a method of inventory control in which items are classified into three categories: A, B, and C. Items in category A are the most important and account for the majority of the value of the inventory. Items in category B are less important and account for a smaller portion of the value of the inventory. Items in category C are the least important and account for a very small portion of the value of the inventory.
ABC analysis is useful for analyzing the inventories based on their quality, usage, and value. By classifying items into these three categories, businesses can focus their attention on the most important items and reduce costs associated with inventory management.
For example, a business may decide to keep a very low level of inventory for items in category C, since these items are not very important and do not account for a large portion of the value of the inventory. The business may also decide to invest in more sophisticated inventory control systems for items in category A, since these items are the most important and account for the majority of the value of the inventory.
ABC analysis can be a very effective tool for inventory management. By classifying items into three categories, businesses can focus their attention on the most important items and reduce costs associated with inventory management.