Acceptable Sampling Plan

A method of inventory valuation where both variable and a portion of fixed costs are assigned to each unit of production. Fixed costs are typically allocated based on labor hours, machine hours, or material costs.

Active stock means the inventory that a business uses, refills, and moves around regularly. This stock includes items with a constant turnover rate, are consistently in demand, and require frequent restocking. Active stock differs from passive or inactive stock, including items that move slowly or are rarely used.

Stock that is accumulated in advance of expected peak demand periods, seasonal sales, or known future events to ensure adequate supply and meet customer needs.

This process ranks items in descending order of their annual dollar volume or other criteria and then splits them into three categories: A (high value), B (moderate value), and C (lower value)