alleryStart learning →In ABC analysis, how is an item's annual usage value computed?
AAnnual need x unit cost
BOpening stock x price
CLead time x unit cost
DOrder size x order cost
Answer & Solution
Correct answer: A. Annual need x unit cost
Multiplying annual requirement by cost per unit gives the yearly money value consumed.
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Related questions
The ABC concept is based on whose law?An item needs 500 units a year at Rs 40 each. What is its annual usage value?After computing usage values, items are arranged in which order?ABC class thresholds are what?Class B holds 30% of items. About what share of annual consumption value does it hold?Half of all items fall in class C. Roughly what share of consumption value do they hold?ABC analysis resembles which principle, where few items carry most value?Which class gets the simplest controls and minimal records?