Certified Supply Chain Professional (CSCP) Practice Exam

Which method of stock location involves grouping high-velocity items together?

1. Fixed-location storage

2. ABC classification

3. Random-location storage

4. Group functionally related items

The correct answer is: ABC classification

The method that involves grouping high-velocity items together is referred to as ABC classification. This approach categorizes inventory based on the importance and turnover rates of items. In this classification, items are divided into three categories: A, B, and C, with 'A' items being the most valuable and high-velocity, while 'C' items represent those that are less critical and have slower turnover. By grouping the high-velocity items together, ABC classification helps to optimize storage efficiency and reduce picking times, as these frequently accessed items are more readily available. This strategic grouping allows supply chain professionals to enhance inventory management practices by focusing resources and space on items that contribute most significantly to overall value and sales. The other methods do not directly focus on velocity in the same way. Fixed-location storage relies on designated spaces for each item, regardless of its turnover rate, potentially leading to inefficiencies for fast-moving goods. Random-location storage may enhance flexibility and space utilization but does not inherently group items based on their movement speed. Grouping functionally related items does enhance organization but does not necessarily prioritize high-velocity items, which is the key feature of ABC classification.