IDEAS home Printed from https://ideas.repec.org/a/spr/opsear/v56y2019i2d10.1007_s12597-019-00365-4.html
   My bibliography  Save this article

ABC classification according to Pareto’s principle: a hybrid methodology

Author

Listed:
  • Siamak Kheybari

    (Ferdowsi University of Mashhad)

  • S. Ali Naji

    (Ferdowsi University of Mashhad)

  • Fariba Mahdi Rezaie

    (Ferdowsi University of Mashhad)

  • Reza Salehpour

    (Sharif University of Technology)

Abstract

So far, many methods have been proposed to classify items based on ABC analysis, but the results of these methods have had relatively low compliance with the principles of ABC. More precisely, collective value and sometimes the number of items belonging to each category in the methods provided do not meet the basic requirements of ABC called Pareto’s principle. In this study, a number of hybrid methodologies including Shannon’s entropy, TOPSIS (the technique for order preference by similarity to ideal solution) and goal programming are respectively used for determining the weight of criteria which are effective in the inventory items classification, calculations of each item value and its classification based on Pareto’s principle. To this end, the value of each item as well as classification of inventory items is calculated based on Pareto’s principle. The performance of the proposed method is evaluated through (1) statistical analysis, (2) checking the percentage of similarity with other methods and (3) comparison with another method in terms of the number and value allocated to each class. The results confirm the capability of the listed method.

Suggested Citation

  • Siamak Kheybari & S. Ali Naji & Fariba Mahdi Rezaie & Reza Salehpour, 2019. "ABC classification according to Pareto’s principle: a hybrid methodology," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 539-562, June.
    • Handle: RePEc:spr:opsear:v:56:y:2019:i:2:d:10.1007_s12597-019-00365-4
    DOI: 10.1007/s12597-019-00365-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12597-019-00365-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12597-019-00365-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pi-Fang Hsu & Mei-Ghing Hsu, 2008. "Optimizing the Information Outsourcing Practices of Primary Care Medical Organizations Using Entropy and TOPSIS," Quality & Quantity: International Journal of Methodology, Springer, vol. 42(2), pages 181-201, April.
    2. Tsai, Chi-Yang & Yeh, Szu-Wei, 2008. "A multiple objective particle swarm optimization approach for inventory classification," International Journal of Production Economics, Elsevier, vol. 114(2), pages 656-666, August.
    3. Hadi-Vencheh, A., 2010. "An improvement to multiple criteria ABC inventory classification," European Journal of Operational Research, Elsevier, vol. 201(3), pages 962-965, March.
    4. Ng, Wan Lung, 2007. "A simple classifier for multiple criteria ABC analysis," European Journal of Operational Research, Elsevier, vol. 177(1), pages 344-353, February.
    5. Zhou, Peng & Fan, Liwei, 2007. "A note on multi-criteria ABC inventory classification using weighted linear optimization," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1488-1491, November.
    6. Gajpal, Prem Prakash & Ganesh, L. S. & Rajendran, Chandrasekharan, 1994. "Criticality analysis of spare parts using the analytic hierarchy process," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 293-297, June.
    7. Golam Kabir & M. Ahsan Akhtar Hasin, 2013. "Multi-criteria inventory classification through integration of fuzzy analytic hierarchy process and artificial neural network," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 14(1), pages 74-103.
    8. Lolli, F. & Ishizaka, A. & Gamberini, R., 2014. "New AHP-based approaches for multi-criteria inventory classification," International Journal of Production Economics, Elsevier, vol. 156(C), pages 62-74.
    9. Golam Kabir, 2012. "Multiple Criteria Inventory Classification Under Fuzzy Environment," International Journal of Fuzzy System Applications (IJFSA), IGI Global, vol. 2(4), pages 76-92, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fatih Yiğit & Şakir Esnaf, 2021. "A new Fuzzy C-Means and AHP-based three-phased approach for multiple criteria ABC inventory classification," Journal of Intelligent Manufacturing, Springer, vol. 32(6), pages 1517-1528, August.
    2. Khaled Belahcène & Vincent Mousseau & Wassila Ouerdane & Marc Pirlot & Olivier Sobrie, 2023. "Multiple criteria sorting models and methods—Part I: survey of the literature," 4OR, Springer, vol. 21(1), pages 1-46, March.
    3. Hung-Lung Lin & Yu-Yu Ma, 2021. "A New Method of Storage Management Based on ABC Classification: A Case Study in Chinese Supermarkets’ Distribution Center," SAGE Open, , vol. 11(2), pages 21582440211, June.
    4. Ahmad, Shafi & Masood, Sarfaraz & Khan, Noor Zaman & Badruddin, Irfan Anjum & Ompal, & Ahmadian, Ali & Khan, Zahid A. & Khan, Amil Hayat, 2023. "Analysing the impact of COVID-19 pandemic on the psychological health of people using fuzzy MCDM methods," Operations Research Perspectives, Elsevier, vol. 10(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hu, Qiwei & Boylan, John E. & Chen, Huijing & Labib, Ashraf, 2018. "OR in spare parts management: A review," European Journal of Operational Research, Elsevier, vol. 266(2), pages 395-414.
    2. Hu, Qiwei & Chakhar, Salem & Siraj, Sajid & Labib, Ashraf, 2017. "Spare parts classification in industrial manufacturing using the dominance-based rough set approach," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1136-1163.
    3. Sheikh-Zadeh, Alireza & Rossetti, Manuel D. & Scott, Marc A., 2021. "Performance-based inventory classification methods for large-Scale multi-echelon replenishment systems," Omega, Elsevier, vol. 101(C).
    4. Liu, Jiapeng & Liao, Xiuwu & Zhao, Wenhong & Yang, Na, 2016. "A classification approach based on the outranking model for multiple criteria ABC analysis," Omega, Elsevier, vol. 61(C), pages 19-34.
    5. Fan Liu & Ning Ma, 2019. "Multicriteria ABC Inventory Classification Using the Social Choice Theory," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    6. Mohammaditabar, Davood & Hassan Ghodsypour, Seyed & O'Brien, Chris, 2012. "Inventory control system design by integrating inventory classification and policy selection," International Journal of Production Economics, Elsevier, vol. 140(2), pages 655-659.
    7. Sisi Wu & Yelin Fu & K. K. Lai & W. K. John Leung, 2018. "A Weighted Least-Square Dissimilarity Approach for Multiple Criteria ABC Inventory Classification," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(04), pages 1-12, August.
    8. Jafar Rezaei & Negin Salimi, 2015. "Optimal ABC inventory classification using interval programming," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(11), pages 1944-1952, August.
    9. Alessio Ishizaka & Maynard Gordon, 2017. "MACBETHSort: a multiple criteria decision aid procedure for sorting strategic products," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(1), pages 53-61, January.
    10. Ishizaka, Alessio & Lolli, Francesco & Balugani, Elia & Cavallieri, Rita & Gamberini, Rita, 2018. "DEASort: Assigning items with data envelopment analysis in ABC classes," International Journal of Production Economics, Elsevier, vol. 199(C), pages 7-15.
    11. Sheikh-Zadeh, Alireza & Rossetti, Manuel D., 2020. "Classification methods for problem size reduction in spare part provisioning," International Journal of Production Economics, Elsevier, vol. 219(C), pages 99-114.
    12. Fatih Yiğit & Şakir Esnaf, 2021. "A new Fuzzy C-Means and AHP-based three-phased approach for multiple criteria ABC inventory classification," Journal of Intelligent Manufacturing, Springer, vol. 32(6), pages 1517-1528, August.
    13. Millstein, Mitchell A. & Yang, Liu & Li, Haitao, 2014. "Optimizing ABC inventory grouping decisions," International Journal of Production Economics, Elsevier, vol. 148(C), pages 71-80.
    14. Zhang, Zeyu & Li, Kevin W. & Guo, Xiaolei & Huang, Jun, 2020. "A probability approach to multiple criteria ABC analysis with misclassification tolerance," International Journal of Production Economics, Elsevier, vol. 229(C).
    15. Bacchetti, A. & Plebani, F. & Saccani, N. & Syntetos, A.A., 2013. "Empirically-driven hierarchical classification of stock keeping units," International Journal of Production Economics, Elsevier, vol. 143(2), pages 263-274.
    16. Molenaers, An & Baets, Herman & Pintelon, Liliane & Waeyenbergh, Geert, 2012. "Criticality classification of spare parts: A case study," International Journal of Production Economics, Elsevier, vol. 140(2), pages 570-578.
    17. Lolli, F. & Ishizaka, A. & Gamberini, R., 2014. "New AHP-based approaches for multi-criteria inventory classification," International Journal of Production Economics, Elsevier, vol. 156(C), pages 62-74.
    18. S. Saffarzadeh & A. Hadi-Vencheh & A. Jamshidi, 2019. "An Interval Based Score Method for Multiple Criteria Decision Making Problems," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 18(05), pages 1667-1687, September.
    19. Hadhami Kaabi & Khaled Jabeur & Talel Ladhari, 2018. "A Genetic Algorithm-Based Classification Approach for Multicriteria ABC Analysis," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 17(06), pages 1805-1837, November.
    20. Giannis Karagiannis & Suzanna M. Paleologou, 2021. "A regression-based improvement to the multiple criteria ABC inventory classification analysis," Annals of Operations Research, Springer, vol. 306(1), pages 369-382, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:opsear:v:56:y:2019:i:2:d:10.1007_s12597-019-00365-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.