Design of a supply chain network for determining the optimal number of items at the inventory groups based on ABC analys
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ORIGINAL ARTICLE
Design of a supply chain network for determining the optimal number of items at the inventory groups based on ABC analysis: a comparison of exact and meta-heuristic methods Omid Abdolazimi1 • Mitra Salehi Esfandarani2 • Davood Shishebori3 Received: 9 April 2019 / Accepted: 7 October 2020 Springer-Verlag London Ltd., part of Springer Nature 2020
Abstract One of the most applicable techniques in the inventory management field is inventory classification based on ABC analysis, a well-known method to set the items in a different group, according to their importance and values. In this paper, a biobjective mathematical model is proposed to improve the inventory grouping based on ABC analysis. The first objective function maximizes the total net profit of the items in the central stock, and the second objective function maximizes the total net profit of items in different wards. The proposed model simultaneously optimizes the service level, the number of inventory groups, and the number of assigned items. To solve the model in small and large dimensions, two exact methods (LP-metric and e-constraint) and two meta-heuristic methods (NSGA-II and MOPSO) are used. Then, to compare those methods in terms of efficiency, the statistical analysis besides the AHP and VIKOR techniques is implemented. The results show the superiority of the e-constraint among the exact methods and MOPSO among meta-heuristic methods. Finally, the proposed model has been implemented in two sets of numerical examples to demonstrate its applicability. Keywords ABC analysis Bi-objective optimization Three-level supply chain Heuristic and meta-heuristic methods
1 Introduction Manufacture, retailer, repair shop, and hospitals usually keep the components and raw material into stock-keeping units (SKUs) to meet the demand [19]. However, the number of these SKUs cannot be large due to difficult individual control [11]. To control the large number of SKUs, an integrated inventory control system is needed to categorize the inventory items into meaningful groups. So
& Davood Shishebori [email protected] Omid Abdolazimi [email protected] Mitra Salehi Esfandarani [email protected] 1
Department of Economy, Kharazmi University, Tehran, Iran
2
Department of Civil Engineering, University of Memphis, Memphis, TN, USA
3
Department of Industrial Engineering, Yazd University, Yazd, Iran
far, various models and methods have been presented to classify the inventories. The ABC analysis is the most commonly used approach for planning and controlling the inventory [5]. The classification of inventories based on ABC analysis enables the organizations to categorize their inventories into meaningful groups. In general, the ABC approach follows the Pareto rule, which means only 20% of inventories make 80% of the total profit, and the remaining 80% of inventories produce only 20% of the profit [23]. Class A has the product with the highest value, and class C has the product with the lowest val
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