Wirtschaftsingenieurwesen und Management

ABC Classification for Inventory Optimization (Case Study Family Supermarket)

Abstract

Aregawi Yemane1*, Alehegn Melesse Semegn2, Ephrem Gidey3

This article deals with comparison between traditional ABC classification (using annual usage only) and an optimal new multi criteria ABC classification (using annual usage, unit price and lead time). ABC inventory classification is a well-known approach to assign items into three basic categories as A, B, and C based on their usage volume and sales. Efficient and effective inventory management helps a firm maintain competitive advantage, especially in a time of accelerating globalization. Most of the super market managers in our country do not use any inventory control techniques to monitoring the huge amount of items in their stock. The aim of this paper is to introduce an optimal multiple-criteria ABC analysis that improves the inventory management control system. On this approach the researchers use additional criteria, such as unit price and lead time.