Assessment of inventory class performance utilising inventory turn and days on hand

John Solomon Jatta and Krishna Kumar Krishnan

International Journal of Inventory Research, 2017, vol. 4, issue 1, 61-74

Abstract: Inventory performance is typically based on individual SKU rather than on class of SKUs. This research evaluates ABC inventory classes for performance based on class inventory turn. Multiple multi-criteria inventory control (MCIC) models are used to classify 47 stock-keeping units into A, B, and C categories and their ABC classes' annual performance evaluated for each model. The results show that A-class consistently has highest turns than B and C classes. For the eight models evaluated all but the R-model show higher turns for A class than both B or C class. B and C classes turn inventory relatively the same number of times with the exception of the R-model. The R-model turns C-class inventory higher than A-class or B-class inventory contrary to ABC principles. The results show that inventory classification can be limited to A and B classes instead of the numerous classes sometimes recommended and practiced in many firms.

Keywords: multi-criteria; inventory turn; inventory days on hands; IDOHs; ABC classification; inventory class performance; multi-criteria inventory control; MCIC. (search for similar items in EconPapers)
Date: 2017
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