Multi-criteria Inventory ABC Classification Approach Using Gaussian AHP

The ABC analysis is a technique widely used by companies to manage inventory items. Usually, ABC analysis classifies items into three categories: A, B, or C, based on annual dollar usage, where A are the most important items, B are moderate items, and C are less important items. From this perspective, to add efficiency to inventory control and determine planning policies, multi-criteria ABC is used. This paper proposes a new ABC classification approach, based on an extension of the Analytic Hierarchy Process (AHP), called Gaussian AHP. The proposed Gaussian AHP methodology uses the normal curve to determine the weights of criteria without dealing with qualitative aspects for distributing the weights. The methodology is applied to a dataset from a Hospital Respiratory Therapy Unit and also from a major aeronautical manufacturer, and the results demonstrate a new categorization of items that enhances inventory management by integrating multi-criteria in a systematic way.