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

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.

Keywords

• Inventory Grouping
• Fuzzy Logic
• Clustering