ITPEC FE Morning April 2023 Question 77
ITPEC FE Morning April 2023 — Question 77 of 80
ABC Analysis — classify products by sales volume or profit contribution.
Products are ranked by sales or gross profit, then divided into levels based on cumulative ratio:
- •A — top ~70-80% of revenue (few items, most value)
- •B — next ~15-20%
- •C — remaining ~5-10% (many items, little value)
The goal is to focus efforts on increasing sales of high-level (A) products.
Why not others:
- (a) — describes geo-marketing or grid analysis (dividing a region into grid sections)
- (c) — describes cross-tabulation analysis (classifying survey data by factor)
- (d) — describes a panel survey (repeatedly surveying the same respondents)
Key rule: ABC analysis = Pareto-based ranking of products into A/B/C tiers by cumulative sales or profit ratio.
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