Periodic review systems are best suited for the C category of items under the ABC classification scheme. a. True
b. False

a. True

Explanation:

ABC classification scheme refers to item analysis that is based upon the principle that there are many less critical items and few critical items by dividing on-hand inventory into three classes which is generally based upon annual dollar volume as follows:

"A items" have very tight control and accurate records

"B items" does not have a tight control and good records

"C items" have minimal records, periodic review, and and characterized by simple controls.

From the above explanation, it is therefore true that periodic review systems are best suited for the C category of items under the ABC classification scheme.

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