Multi-criteria ABC inventory classification using AHP: a case study

In ABC classification of inventory method, stocks are divided into three categories based on their importance. This classification guides managers while determining the inventory control policies of the products. The traditional ABC classification is based on a single criterion - annual usage value. However, when determining the importance of inventory items, the classification will be more accurate when more than one criterion such as annual usage values, lead time, availability, replacement possibilities, and the effects of out-of-stock situations are taken into account. By adapting multi-criteria decision models to the ABC stock classification system, the importance levels of the inventory items can be determined using more than one criterion. In this study, it is aimed to present a roadmap for the use of the Analytical Hierarchy Process in multi-criteria ABC stock classification. In the application section, the products brought from abroad by a nutritional supplement company were studied and the products of the company were classified using the multi-criteria ABC stock method. The classifications based on the traditional single-criteria ABC method and the multi-criteria ABC method were compared.