AN INVENTORY CLASSIFICATION APPROACH COMBINING EXPERT SYSTEMS, CLUSTERING, AND FUZZY LOGIC WITH THE ABC METHOD, AND AN APPLICATION

Adnan Aktepe,N Barisci,Ak Turker,A Dalgic,S Ersoz

doi:10.7166/29-1-1784

Abstract

The classification of inventories requires using several criteria to control different functions of inventory management. In this study, a new classification algorithm, called the FNS (functional, normal, and small) algorithm, is developed that combines classical ABC classification with a new grouping strategy. In the algorithm, handling frequency, lead time, contract manufacturing process, and specialty are used as input criteria, and the outputs are new classes for the inventories. The algorithm is applied in a large company operating in the defence industry. The main problem in the company is not being able to manage and track inventories effectively. The company has previously used the Pareto analysis approach, but this no longer met the company’s inventory management needs. In our study, the ABC classification method is enriched and combined with the proposed FNS algorithm to create nine different classes for inventories. To achieve this, the classical ABC classification method is integrated with expert systems, clustering, and fuzzy logic methods. Now, inventories can be classified in more detail, and useful counting strategies can be created. The classification system developed is currently being used by the company, and is integrated into its enterprise resources planning (ERP) system.

Highlights

Inventories are physical objects, they are important investments for companies
Production without any failure, best service to the customer, and maximising the profitability of businesses cannot be imagined without an efficient inventory management
In today’s economy, with the continuous increase in competition, the importance of efficient inventory management increases daily; but this is only possible with well-implemented inventory policies and accurate decisions

Summary

INTRODUCTION

Inventories are physical objects, they are important investments for companies. Inventories that tie up the cash capital of businesses have key functions for satisfying customer demand These turn into an advantage through efficient inventory control and management [1]. In today’s economy, with the continuous increase in competition, the importance of efficient inventory management increases daily; but this is only possible with well-implemented inventory policies and accurate decisions. Companies that reduce their costs in this way, and provide the best service in the shortest time for their customers, will have competitive advantage. In the eight-step FNS algorithm developed in this study, classification of the inventories is carried out by using different criteria such as handling frequency, lead time, contract manufacturing, and specialty.

LITERATURE REVIEW

C2 C3 C4 Assigned group

CONCLUSION