ITPEC IP October 2019 Question 72
ITPEC IP October 2019 — Question 72 of 100
ABC analysis ranks items by importance using their cumulative contribution to sales, value, usage, or another measure. Items are commonly divided into a small high-impact A group, an intermediate B group, and a larger low-impact C group so management effort can be prioritized.
Answer (d)
Why not others:
- a fishbone diagram organizes possible causes of a problem
- analyzing a relationship between two variables uses correlation or a scatter diagram
- testing samples to judge a population describes acceptance sampling
Key rule: ABC analysis applies the Pareto principle to focus tight control on the relatively few items with the greatest cumulative importance.
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