Traditional ABC Inventory Classification VS Multi-Criteria Inventory Classification

This video shows how to solve inventory classification problem using multi-criteria. The video also compares the results of single criterion ABC classification with multi-criteria ABC classification. The video highlights the shortcomings of traditional ABC inventory classification and addresses the issues by using multi-criteria inventory classification.

Total score formula used in multi-criteria:
For item i:
Total score = (Criteria 1 value * Weight under criteria 1) + (Criteria 2 value * Weight under criteria 2) +...+ (Criteria n value * Weight under criteria n)

References:
Iqbal, Q., Malzahn, D., & Whitman, L. (2017). Statistical analysis of multi-criteria inventory classification models in the presence of forecast upsides. Production & Manufacturing Research, 5(1), 15-39.

Hadi-Vencheh, A. (2010). An improvement to multiple criteria ABC inventory classification. European Journal of Operational Research, 201(3), 962-965.

Zhou, P., & Fan, L. (2007). A note on multi-criteria ABC inventory classification using weighted linear optimization. European journal of operational research, 182(3), 1488-1491.

#Inventory
#Pareto
#ABCClassification
#multi-criteria