For the group C items, the company should develop a very simple inventory policy, and this may include a relatively large safety stock. Since the items cost very little, the holding cost associated with a large safety stock will also be very low, more care should be taken in determining the safety stock with the higher priced group B items. For the very expensive group A items, the cost of carrying the inventory is so hight, it is beneficial to carefully analyze the demand for these
so that safety stock is at an appropriate level. Otherwise, the company may have exceedingly high holding costs for the group A items.