Fuzzy Continuous Review Inventory Model using ABC Multi-Criteria Classification Approach: A Single Case Study
Abstract. Inventory is considered as the most expensive, yet important,to any companies. It representsapproximately 50% of the total investment. Inventory cost has become one of the majorcontributorsto inefficiency, therefore it should be managed effectively. This study aims to propose an alternative inventory model, Â by using ABC multi-criteria classification approach to minimize total cost. By combining FANP (Fuzzy Analytical Network Process) and TOPSIS (Technique of Order Preferences by Similarity to the Ideal Solution), the ABC multi-criteria classification approach identified 12 items of 69 inventory items as â€œoutstanding important classâ€ that contributed to 80% total inventory cost. This finding Â is then used as the basis to determine the proposed continuous review inventory model.This study found that by using fuzzy trapezoidal cost, the inventory Â turnover ratio can be increased, and inventory cost can be decreased by 78% for each item in â€œclass Aâ€ inventory.
Keywords:ABC multi-criteria classification, FANP-TOPSIS, continuous review inventory model lead-time demand distribution, trapezoidal fuzzy number
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