Certified Logistics Technician (CLT) 2025 – 400 Free Practice Questions to Pass the Exam

In ABC inventory management, the classification of inventory items is based on their value to the business, typically considering both the cost of the goods and the frequency of their sales. The items identified as the lowest value goods are generally characterized by low demand and, consequently, low turnover rates.

Low-demand items are less critical to the operations and profitability of a business compared to high-demand items, which contribute significantly to revenue. Since these items do not sell often, they tie up less capital and storage space, ultimately classifying them into category C of the ABC analysis, while higher-demand items, which have a significant impact on revenue, fall into category A.

Understanding this classification can help businesses prioritize inventory management efforts; for example, they may focus on optimizing stock levels and replenishment strategies for higher-value and higher-demand items, while managing low-demand items differently, perhaps with less frequent restocking or different promotional strategies to boost sales. This strategic approach maximizes efficiency and aligns inventory levels with sales performance.