Describe the ABC inventory matrix, and how is it used to manage inventory.
What will be an ideal response?
An ABC inventory matrix is used to assist in identifying obsolete stocks and to analyze whether a company is stocking the correct inventories by comparing two ABC analyses. The vertical axis of the ABC inventory matrix shows the firm's inventory classification based on inventory usage whereas the horizontal axis shows the firm's inventory classification based on physical inventory.
Items appearing along the diagonal of the matrix suggest inventory matches sales. Items in the top left triangle indicate under-stocked A and B items, whereas items in the lower right triangle suggest overstocked B and C items, or obsolete stocks.
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Fill in the blank(s) with correct word
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