Multi-criteria ABC inventory classification with mixed quantitative and qualitative criteria

Large firms usually employ the well-known ABC inventory classification technique to have an efficient control on a huge amount of inventory items. While the traditional inventory classification method only considers one criterion, namely the annual dollar usage to classify inventory items, the recen...

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Bibliographic Details
Published in:International journal of production research 2014-02, Vol.52 (3), p.776-786
Main Authors: Hatefi, S.M., Torabi, S.A., Bagheri, P.
Format: Article
Language:English
Subjects:
Classification
Comparative studies
Criteria
DEA
Inventories
Inventory management
multi-criteria ABC inventory classification
Operations research
Optimization
Optimization techniques
quantitative and qualitative criteria
Stockpiling
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Summary:Large firms usually employ the well-known ABC inventory classification technique to have an efficient control on a huge amount of inventory items. While the traditional inventory classification method only considers one criterion, namely the annual dollar usage to classify inventory items, the recent literature shows a focus on multi-criteria inventory classification (MCIC) techniques. Surprisingly, among several methods that have been developed for the MCIC problem, there are just a few, which clearly account for qualitative criteria, while most of the affecting criteria are of qualitative type in nature. This paper presents a modified linear optimisation method that enables inventory managers to classify a number of inventory items in the presence of both qualitative and quantitative criteria without any subjectivity. Furthermore, an efficient procedure is proposed to maximise the minimum importance attached to various criteria leading to improvement of discriminating power among inventory items. For validating the proposed method, it is applied on a case study taken from the literature and a comparative study with the existing competent methods is also provided.
ISSN:0020-7543
1366-588X
DOI:10.1080/00207543.2013.838328