Juan has a retail business selling skateboard supplies he maintains large stockpiles of every item he sells in a warehouse on the outskirts of town he keeps finding that he has to reorder certain supplies all the time but others only once a year how can he solve this problem?

Focus his stock on the most vital items while keeping those that do not sell as well at lower levels.

Focus his stock on the most vital items while keeping those that do not sell as well at lower levels.

Explanation:

Juan has a very loose control over her inventory, it is not a good inventory control system to maintains large stockpiles of every item he sells in a warehouse.

She is advised to employ the use of ABC inventory control system. This system is very suitable for business that maintain variety of inventories. All the inventories a categorized according to value and turnover,

Category A - The inventory with the highest value or volume turnover is categorized as A item, the entity must keep a very tight control over such inventory

Category B - The inventories that is next to A in value and volume of turnover fall into this category and the control here may not be as strict as category A but must be more than that of category C

Category C - These are inventories that has a very low turnover and possibly lowest in value also. The lowest control is exercised on this type of inventory.

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