In ABC analysis, which category has high annual consumption value?

• A. Low-value items (C category)
• B. Medium-value items (B category)
• C. High-value items (A category)
• D. All items equally

Answer: (C)

In ABC analysis, items are ranked by annual consumption value (unit price times annual usage) and then grouped into three categories: high-value, medium-value, and low-value. The group with the highest annual consumption value contains only a small portion of items, but it drives the majority of total inventory value. Because these items have the biggest impact on cost, they receive tighter control, more accurate records, and more frequent reviews. The remaining items fall into medium-value and low-value categories, with low-value items often being numerous but contributing little to overall value. So, the category with high annual consumption value is the high-value items group.