CPIM Practice Exam

If an item is classified as a C item in ABC analysis, how often is it counted?

1. Weekly

2. Quarterly

3. Annually

4. Monthly

The correct answer is: Annually

In ABC analysis, items are categorized into three groups based on their annual consumption value, with A items being the most valuable, B items being of moderate value, and C items having the least value. C items typically represent a large number of items that contribute a small portion to the overall inventory value. Because C items are less critical in terms of their financial impact, they are counted less frequently than A and B items. An annual counting cycle is sufficient to maintain accurate records for these lower-value items. This approach balances the need for inventory accuracy with the costs and resources associated with counting, allowing organizations to allocate more time and effort to the more critical A and B items. Choosing an annual count frequency for C items reduces the workload on inventory management while still ensuring that inventory records remain sufficiently accurate for operational needs.