The correct answer is: ABC Analysis.
ABC analysis is a method of inventory control in which items are classified into three categories (A, B, and C) based on their annual dollar usage. A-items are the most important items, accounting for the majority of annual dollar usage. B-items are less important, accounting for a moderate amount of annual dollar usage. C-items are the least important, accounting for a small amount of annual dollar usage.
ABC analysis is used to control spare parts because it allows businesses to focus their attention on the most important items. By focusing on A-items, businesses can ensure that they have the right amount of inventory on hand to meet customer demand. This can help to reduce costs and improve customer satisfaction.
Here is a brief explanation of each option:
- A. ABC Analysis is a method of inventory control in which items are classified into three categories (A, B, and C) based on their annual dollar usage. A-items are the most important items, accounting for the majority of annual dollar usage. B-items are less important, accounting for a moderate amount of annual dollar usage. C-items are the least important, accounting for a small amount of annual dollar usage.
- B. JIT Inventory System is a method of inventory control in which materials and components are delivered just as they are needed for production. This system can help to reduce costs by minimizing inventory levels. However, it can also be risky if there are disruptions in the supply chain.
- C. VED Analysis is a method of inventory control in which items are classified into three categories (V, E, and D) based on their value, urgency, and criticality. V-items are the most valuable items, E-items are the most urgent items, and D-items are the most critical items.
- D. Perpetual Inventory System is a system of inventory control in which the inventory level is updated on a continuous basis. This system can help to ensure that the right amount of inventory is on hand to meet customer demand. However, it can also be expensive to implement and maintain.