Manag., July-2016-Q41
- Option : D
- Explanation : VED Analysis: Just like ABC Analysis for the classification of inventories, there is an inventory management technique called VED. In VED analysis inventory items are classified depending upon their critically in terms of their effect on the production function. The degree of criticality states whether the item of inventory is vital, or essential or desirable for the retail store;, This classification of dividing inventory is known as VED analysis, where V stands for vital, E stands for essential and D stands for desirable items.
Objective: The VED analysis is applied to determine the criticality of an item for displaying in a retail store and its immediate effect on overall buying and other services. It is specially used for material management. Under this analysis, for ‘V’ items, a large stock of inventory is usually maintained, while for ‘D’ type items, the minimum stock is sufficient.
