FAHP in Multi-Criteria Inventory Classification for Storage Layout

Proceedings of The International Conference on Advanced Research in Applied Science and Engineering

Year: 2019

DOI: https://www.doi.org/10.33422/raseconf.2019.07.359

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FAHP in Multi-Criteria Inventory Classification for Storage Layout

Sirarat Nitkratoke and Prasert Aengchuan



Purpose of this study is to propose the inventory layout after the inventory were classified when multi-criteria are considered. Fuzzy Analytic Hierarchy Process (FAHP) was applied to analyse the pairwise comparison of criteria weight. Trapezoidal fuzzy numbers were used to define the linguistic score, which is obtained opinion of experts in inventory control field. The considered criteria were eliminated from 8 to 4 for the weight of importance in multi-criteria ABC inventory classification for classifying the Ultra High Temperature (UHT) milk inventory in a distribution center. The last process will be allocating the items into the multi-layer storage by using vertical class-based policy. The proposed model is illustrated by applying to 33 brands of UHT milk products from a distribution center in one of department stores in Thailand. The result of the FAHP method shows that 4 criteria such as ordering cost, selling volume, perishability and opportunity cost are the most criteria that the inventory manger in this company concern. For classification, total score for each brand after the normalization changed 27 brands’ order. The changing order made 8 out of 33 brands moved to another class. After allocating the inventory, the layout has obviously changed on the 4th to 6th layer. The results of the proposed model show that FAHP for multi-criteria inventory classification can be applied to the ABC inventory classification method. According to the opinion of specialists, the proposed method can be deployed to improve efficiency of inventory control.

Keywords: ABC classification, FAHP, inventory layout, Multi-criteria decision making.