The Multi-criteria System and Entropy Method for ABC Inventory Classification

Reasonable inventory classification is very important to inventory management in enterprises.Basing on the existing ABC inventory classification index system,this paper points out that fluctuation in demand is of great importance to inventory classification,and then designs the multi-criteria system considering coefficient of variation for ABC inventory classification.Further,the paper analyzes the influence of criteria difference in inventory classification and proposes the Entropy method.Compared with previous literature,the designed multi-criteria system takes different characteristics of inventory into account.A case study of a household electrical appliance enterprise shows that the proposed multicriteria system and Entropy method for ABC inventory classification contributes to make reasonable inventory decisions and improves the management performance of enterprises.