ITPEC FE Morning April 2019 Question 77
ITPEC FE Morning April 2019 — Question 77 of 80
ABC Analysis — a method for classifying items by cumulative sales or profit contribution.
Correct answer: b) ABC analysis ranks products by sales volume or gross profit in descending order, divides them into categories (A, B, C) based on cumulative ratio, and focuses efforts on the highest-contributing group. This applies the Pareto principle (80/20 rule) to inventory or product management.
Why not others:
- a) describes geo-marketing or grid analysis — dividing a region into sections based on population and purchasing power
- c) describes cross-tabulation analysis — classifying survey data by factors to analyze purchasing patterns
- d) describes a panel survey — repeatedly surveying the same respondents to track trends over time
Key rule: ABC analysis = ranking items by contribution (sales/profit) → grouping into A/B/C tiers → prioritizing top contributors. Think "Pareto applied to products."
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