A multiattribute ABC classification model using fuzzy AHP

ABC analysis is one of the most widely used techniques in organizations to classify inventory items. This classification is based on the Pareto principle. The main limitation of the Pareto principle comes from its one dimensional analysis. To overcome this limitation, an ABC analysis based on a multiattribute classification can be used. Many attributes are hard to define precisely in this analysis. The fuzzy set theory can overcome this problem by incorporating imprecision and subjectivity into a multiattribute ABC classification model. In this paper, Zeng´s fuzzy analytic hierarchy process is used for classifying inventory items by taking care of conflicting attributes like demand, unit cost, substitutability, payment terms, and lead time. A real case study in a Turkish firm distributing fast moving consumer goods is realized. The obtained results show that this multiattribute fuzzy methodology can be effectively used in classifying inventory items.