In ABC analysis of inventory, category 'A' typically refers to items that are:
AHigh value with low quantity
BLow value with high quantity
CMedium value with medium quantity
DItems pending obsolescence review
Answer & Solution
Correct answer: A. High value with low quantity
1. ABC analysis classifies inventory by value and usage rather than alphabetically.
2. Category A consists of items that account for a small share of total quantity but a large share of total value.
3. Such items demand the tightest control and frequent review.
4. Category B and C represent moderate and low value items respectively.
_Source: ICAI BoS Inter Paper 3, Ch 2 "Material Cost", §2.4.6 ¶1-3_
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