{"id":44288,"date":"2024-04-15T21:41:38","date_gmt":"2024-04-15T21:41:38","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=44288"},"modified":"2024-04-15T21:41:38","modified_gmt":"2024-04-15T21:41:38","slug":"is-a-technique-of-material-cost-control-which-leads-to-low-carrying-cost-as-a-result-of-low-investment-in-inventory","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/is-a-technique-of-material-cost-control-which-leads-to-low-carrying-cost-as-a-result-of-low-investment-in-inventory\/","title":{"rendered":". . . . . . . . is a technique of material cost control which leads to low carrying cost as a result of low investment in inventory."},"content":{"rendered":"

[amp_mcq option1=”ABC Analysis” option2=”JIT Inventory System” option3=”VED Analysis” option4=”Perpetual Inventory System” correct=”option1″]<\/p>\n

The correct answer is: ABC Analysis<\/strong>.<\/p>\n

ABC analysis is a technique of material cost control which leads to low carrying cost as a result of low investment in inventory. It classifies items into three categories: A, B, and C. A items are the most important items, accounting for the majority of the cost of inventory. B items are less important items, accounting for a smaller percentage of the cost of inventory. C items are the least important items, accounting for a very small percentage of the cost of inventory.<\/p>\n

ABC analysis helps businesses to focus their attention on the most important items, which can lead to significant cost savings. By focusing on A items, businesses can reduce the amount of inventory they carry, which can lower carrying costs. Additionally, businesses can improve their inventory management by focusing on A items, which can lead to fewer stockouts and lower costs associated with lost sales.<\/p>\n

Here is a brief explanation of each option:<\/p>\n