Multiple Criteria Inventory Classification in an Electronics Firm

Abstract

Efficient inventory classification is a vital activity for electronics firms that work with a large amount of inventory items. Although one of the most widely used techniques in inventory classification is ABC analysis, this technique considers only a single criterion as the annual sales volume of each item. In practice, inhomogeneity and the differences among the inventory items necessitate considering multiple criteria to obtain a reliable classification. In this study, an integrated process of the analytic hierarchy process (AHP)-The technique for order preference by similarity to the ideal solution (TOPSIS)-ABC approach is proposed and performed to solve the multiple criteria inventory classification problem in an electronics firm. The steps of the interactive approach are programmed using MATLAB. The results of the integrated interactive approach and of the traditional ABC analysis are presented. The proposed approach gives effective and implementable results for the firm.