Which inventory system is the following paragraph describing? When using the ranking method within this system, this method is based on Pareto concept (80/20 rule) and total usage in dollars of each item. It suggests that three classification of inventory items are used where the most used items are counted more frequently than the less used items. This is because experience shows that the more often a product is received or shipped, the less accurate is the computer stock balance. 1) The Continuous Review System 2) The ABC or Cycle Counting Method 3) The EOQ Model 4) The Periodic Review System