Certified Professional Public Buyer (CPPB) Practice Test

What are the three classifications of inventory under the ABC classification?

1. Class A items, Class B items, Class C items

2. High value items, Medium value items, Low value items

3. Critical items, Non-critical items, Obsolete items

4. Essential items, Optional items, Unnecessary items

The correct answer is: Class A items, Class B items, Class C items

The classification of inventory into three categories—Class A items, Class B items, and Class C items—provides a structured approach to inventory management, enabling organizations to prioritize their inventory levels and management efforts based on the value and importance of different items. Class A items represent a small number of items that account for a large portion of the inventory value. These are often high-value items that require tight control and frequent monitoring. Class B items are of moderate value and volume, necessitating a balanced level of inventory management. Class C items are numerous but represent a small fraction of total inventory value. This classification helps businesses allocate resources efficiently by focusing more on high-value items while managing the less critical items in a more streamlined manner. This systematic approach allows organizations to optimize their inventory turnover rates, reduce costs, and enhance overall efficiency in their operations. The other choices propose different classifications that, while relevant in various contexts, do not align with the well-established ABC inventory classification method.