Alignment between an ABC classification and results from an optimization approach

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

Standard

Alignment between an ABC classification and results from an optimization approach. / Larsen, Christian.
In: INFOR: Information Systems and Operational Research, Vol. 59, No. 3, 08.2021, p. 400-410.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

Vancouver

Larsen C. Alignment between an ABC classification and results from an optimization approach. INFOR: Information Systems and Operational Research. 2021 Aug;59(3):400-410. doi: 10.1080/03155986.2021.1907073

Author

Larsen, Christian. / Alignment between an ABC classification and results from an optimization approach. In: INFOR: Information Systems and Operational Research. 2021 ; Vol. 59, No. 3. pp. 400-410.

Bibtex

@article{be3d4a64179543238c4339821fc693c1,

title = "Alignment between an ABC classification and results from an optimization approach",

abstract = "The paper analyzes a multi-item inventory system, using independent (R,Q) policies. The aim is to minimize the average stock level while keeping a weighted (across items) fill rate service level at a given target. The paper explores whether the optimal order sizes and the optimal safety factors are aligned with the ABC classification. Our results show that A items should be ordered more frequently followed by B items and C items. Concerning the optimal safety factors, our results depend on the weights applied in the specification of the weighted service level. If all items have equal weight, A items should have the lowest safety factors followed by B and C items. If the weights are the demand rates, the ranking of the safety factors follows the ratios between the demand rate and the unit purchase price, and the higher this ratio is, the higher is the optimal safety factor. However, this ranking is completely aligned with the ABC classification given that the demands are transformed into monetary units.",

keywords = "ABC classification, INVENTORY CONTROL, Inventory control",

author = "Christian Larsen",

year = "2021",

month = aug,

doi = "10.1080/03155986.2021.1907073",

language = "English",

volume = "59",

pages = "400--410",

journal = "INFOR: Information Systems and Operational Research",

issn = "0315-5986",

publisher = "Taylor & Francis ",

number = "3",

}

RIS

TY - JOUR

T1 - Alignment between an ABC classification and results from an optimization approach

AU - Larsen, Christian

PY - 2021/8

Y1 - 2021/8

N2 - The paper analyzes a multi-item inventory system, using independent (R,Q) policies. The aim is to minimize the average stock level while keeping a weighted (across items) fill rate service level at a given target. The paper explores whether the optimal order sizes and the optimal safety factors are aligned with the ABC classification. Our results show that A items should be ordered more frequently followed by B items and C items. Concerning the optimal safety factors, our results depend on the weights applied in the specification of the weighted service level. If all items have equal weight, A items should have the lowest safety factors followed by B and C items. If the weights are the demand rates, the ranking of the safety factors follows the ratios between the demand rate and the unit purchase price, and the higher this ratio is, the higher is the optimal safety factor. However, this ranking is completely aligned with the ABC classification given that the demands are transformed into monetary units.

AB - The paper analyzes a multi-item inventory system, using independent (R,Q) policies. The aim is to minimize the average stock level while keeping a weighted (across items) fill rate service level at a given target. The paper explores whether the optimal order sizes and the optimal safety factors are aligned with the ABC classification. Our results show that A items should be ordered more frequently followed by B items and C items. Concerning the optimal safety factors, our results depend on the weights applied in the specification of the weighted service level. If all items have equal weight, A items should have the lowest safety factors followed by B and C items. If the weights are the demand rates, the ranking of the safety factors follows the ratios between the demand rate and the unit purchase price, and the higher this ratio is, the higher is the optimal safety factor. However, this ranking is completely aligned with the ABC classification given that the demands are transformed into monetary units.

KW - ABC classification

KW - INVENTORY CONTROL

KW - Inventory control

U2 - 10.1080/03155986.2021.1907073

DO - 10.1080/03155986.2021.1907073

M3 - Journal article

VL - 59

SP - 400

EP - 410

JO - INFOR: Information Systems and Operational Research

JF - INFOR: Information Systems and Operational Research

SN - 0315-5986

IS - 3

ER -

Department of Economics and Business Economics