Inventory classifications of A, B, and C are based on:

• A. The value and usage frequency of inventory items (ABC analysis)
• B. The supplier's country of origin
• C. The expiration dates of inventory items
• D. The physical location of inventory in the warehouse

Answer: (A)

Verified step by step guidance

1. Understand the concept of ABC analysis: ABC analysis is a method of categorizing inventory items based on their value and usage frequency. It helps businesses prioritize resources and focus on the most critical items.
2. Learn the classification criteria: In ABC analysis, inventory items are divided into three categories: A (high value, low frequency), B (moderate value and frequency), and C (low value, high frequency). This categorization is based on the Pareto principle, where a small percentage of items account for the majority of the value.
3. Compare the given options: Evaluate each option provided in the problem to determine which aligns with the definition of ABC analysis. The correct answer should relate to the value and usage frequency of inventory items.
4. Eliminate incorrect options: Discard options that do not pertain to the value and usage frequency of inventory items, such as the supplier's country of origin, expiration dates, or physical location in the warehouse.
5. Select the correct answer: Based on the understanding of ABC analysis, choose the option that correctly describes the classification criteria as 'The value and usage frequency of inventory items.'