CIPS Whole Life Asset Management (L4M7) Practice Test

The correct answer is C, which identifies Category C items as those characterized by low value and infrequent usage. In inventory management and categorization, items are often classified into categories based on their importance and usage frequency.

Category C items tend to represent the bulk of inventory in terms of the number of items, but they contribute a relatively small portion to the overall value of the inventory. This categorization allows businesses to apply different management strategies. For instance, since these items are not critical to operations and are less expensive, they require less stringent control compared to higher-value or frequently used items.

By focusing on the management of Category A and B items, which are higher in importance and value, organizations can allocate resources more effectively, ensuring that their inventory management practices are both efficient and cost-effective. This strategic approach helps in optimizing the procurement process without over-investing in low-value inventory.

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