Inventory management using both quantitative and qualitative criteria in manufacturing system

The success parameters for any company are on time completion, within specific budget and with requisite performance. In particular an efficient and effective inventory management helps a firm maintaining competitive advantage, especially in a time of accelerating globalization. From this point of view several organizations employ the ABC analysis to have an efficient control on a large number of inventory items. With the increasing levels of integration in manufacturing and service systems conventional ABC analysis is limited because it accounts for only one criterion, mostly ‘‘annual dollar usage’’, for classifying inventory items. To alleviate this shortcoming, this paper proposes a modified version of ABC analysis and Cross Analysis based on Analytic Network Process, a multicriteria approach, that allows to consider several criteria all at once for the optimal choice of materials management.