Which principle does the ABC inventory classification system use?

The ABC inventory classification system is designed to help businesses prioritize their inventory management based on the value and turnover rate of different items. This approach classifies inventory into three categories: A, B, and C.

Items in category A are typically the most valuable, making up a significant portion of the total inventory value but representing a small percentage of the total items held. These items usually have a high turnover rate, indicating they sell quickly. This focus allows businesses to allocate resources efficiently towards the management and control of high-value items.

Category B items are of moderate value and turnover, while category C consists of items that are the least valuable but might make up a larger volume of stock. By emphasizing the value and frequency of turnover, businesses can optimize their investment in inventory and improve overall operational efficiency.

Other options focus on aspects like size and weight, price fluctuations, or supplier reputation, which do not align with the specific criteria of the ABC classification system that focuses purely on value and turnover.