A drug store in a district hospital classifies its medicines into categories based on annual expenditure: a small proportion of items accounts for the bulk of spending, while many cheap items account for little. This inventory control technique is called:

• A VED analysis
• B ABC analysis ✓
• C EOQ analysis
• D XYZ analysis

Explanation

ABC analysis ranks items by annual consumption value: about 10 percent of items (A) consume around 70 percent of the budget and receive tight managerial control, while category C contains many low cost items. VED analysis instead classifies by criticality to patient care into vital, essential and desirable, which is independent of cost. EOQ calculates the optimal order quantity to minimise ordering plus carrying costs, and XYZ classification is based on demand variability, not expenditure share.

Reference: Park's Textbook of Preventive and Social Medicine, 27th ed.

High-yield for: NEET PGINI-CETNExTFMGEUSMLEPLABMRCP

Written and medically reviewed by the StethoPrep medical team.