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Effects of Qualitative Factor and Weight Assignment In Multi-criteria Inventory Ranking Method

<p> This research explores two main problems encountered in multi-criterion inventory classification and ranking. The first problem is the integration of quantitative criteria with qualitative criteria. Most of the research in the field of multi-criterion inventory classification and ranking neglects qualitative criteria, as they are difficult to apply as compared with quantitative criteria. Even for the research that considers qualitative criteria for classification and ranking, the sensitivity of the qualitative criterion has not been explored. The second problem is the weight assignment to the criteria, both qualitative and quantitative, when integrated for classification and ranking of inventory items. Weight assigned to the criteria should represent relative importance of one criterion to another. Input of inventory managers are needed in assigning the weights. </p><p> An integrated inventory ranking and classification method is developed using the Analytic Hierarchy Process (AHP) and The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method to rank and classify inventory items using quantitative and qualitative criteria. Classification and ranking of inventory items are industry-specific and differ from one industry to another. Classification and ranking can differ significantly between industries of the same type. Even the same type of industry can have a different philosophy and objective of inventory management, which influences the relative importance of the criteria and affects the classification and ranking. Classification and ranking are sensitive to the settings of the qualitative factor. Industries that gave higher priority to qualitative factors are affected more by change in the qualitative criterion's settings, as classification and ranking changes the most for them. Ranking is very sensitive and complex, as small change in any parameter is enough to change the rank without affecting the classification.</p>
Date18 February 2016
CreatorsK. C., Manish
PublisherUniversity of Louisiana at Lafayette
Detected LanguageEnglish

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