Multiple criteria ABC inventory classification using two virtual items

ABC inventory classification is one of the most popular techniques for organisations to efficiently plan and control thousands of inventory items. Its traditional way is solely based on a single criterion; however, it has been recognised that multiple criteria need to be considered in practice. An alternative approach to multiple criteria inventory classification (MCIC) is proposed by using two virtual items and incorporating the TOPSIS. The proposed approach improves some previous allied methods as it provides a more reasonable and comprehensive performance index and a unique inventory classification without any subjectivity. Comparisons with other allied methods are illustrated through a case study.