A comparative study on multicriteria ABC analysis in inventory management

ABC analysis is a well-known approach to classifying inventory items. Traditionally, a single criterion, the annual dollar usage of stock-keeping units (SKUs), is employed in the classification process. However, in many cases, other criteria may also play a significant role in classifying SKUs. Therefore, a recent trend is to develop various procedures to conduct ABC analysis in terms of multiple criteria. This article examines several multiple criteria ABC analysis procedures and a comparative study of their classification results is carried out by using 47 SKUs in a hospital inventory system. Our results indicate that these different approaches produce statistically consistent rankings.