A Rough Set Approach to Multiple Criteria ABC Analysis

A dominance-based rough set approach (DRSA) to multiple criteria ABC analysis (MCABC) is designed and compared to other approaches using a practical case study. ABC analysis is a well-known inventory planning and control approach, which classifies inventory items, or stock-keeping units (SKUs), based solely on their annual dollar usage. Recently, it has been suggested that MCABC can provide more managerial flexibility by considering additional criteria such as lead time and criticality. This paper proposes an MCABC method that employs DRSA to generate linguistic rules to represent a decision maker’s preferences based on the classification of a test data set. These linguistic rules are then applied to classify other SKUs. A case study is used to compare the DRSA with other MCABC approaches to demonstrate the applicability of the proposed method.