What type of analysis would be used to manage inventory effectively based on value and control?

The correct answer is ABC analysis, which is a method used for categorizing inventory based on importance and value. This analysis divides inventory into three categories: A items, which are high-value items that account for a significant portion of inventory costs; B items, which are moderate-value items; and C items, which are low-value items. By focusing on the A items, managers can apply more stringent control measures to ensure that these critical resources are well-managed and accounted for, leading to improved inventory management decisions.

This method allows companies to allocate their resources efficiently, ensuring that high-value items receive the necessary attention and management. Consequently, it enables a more effective approach to inventory management based on the value and control required for different categories of items. Utilizing ABC analysis can lead to cost savings and improved service levels by prioritizing items that have the most significant impact on the overall operational performance.

The other types of analyses mentioned serve different purposes. For instance, SWOT analysis focuses on identifying strengths, weaknesses, opportunities, and threats, often used for strategic planning rather than specific inventory management. Cost-benefit analysis evaluates the financial merits of decisions but does not categorize and prioritize inventory items based on their value. PESTLE analysis examines external factors such as political, economic,