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<p>a- Higher Safety Stock</p> <p>b- Frequent Deliveries</p> <p>c- Periodic Inventory system</p> <p>d- Updating of inventory records</p> <p> </p>
Option C
same delivery frequency, safety stock reduced from2.5 to1.5 weeksa, require tighter control with more man・hours.
B- Frequent deliveries
c
~B frequent deliveries because reorder point for class A items achieve faster as business sales. The80/20 rules applies here.80% of sales are achieved by20% items (ABC analysis)
A
(C)
ABC classifications allow the inventory manager to assign priorities for inventory control. Strict control needs to be kept on A and B items, with preferably low safety stock level. Taking a lenient view, the C class items can be maintained with looser control and with high safety stock level. The ABC concept puts emphasis on the fact that every item of inventory is critical and has the potential of affecting ,adversely, production, or sales to a customer or operations. The categorization helps in better control on A and B items.
In addition to other management procedures, ABC classifications can be used to design cycle counting schemes. For example, A items may be counted3 times per year, B items1 to2 times, and C items only once, or not at all.
c- Periodic Inventory system.
A. update of inventory records and C periodic inventory system (check/reporting) are the most essential for any inventory management system.
Answer is option A- Higher Safety Stock
A Category Items: Helps one identify these stocks as high value items and ensure tight control in terms of process control, physical security as well as audit frequently.
ANSWER C
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