A new approach to inventory classification using a multi-criteria decision-making method to increase business efficiency

Inventory management is regarded as a substantial revenue source for the departments as well as their primary source of waste and expense. Thus, manufacturing and sales departments store parts and raw materials to prevent stock-outs. Production delays, shortages, and unsatisfied consumers result from inventory shortages. Many academics and professionals have conducted studies to address this problem throughout the past decades. This research aims to give an assessment of the literature and proposed two methods to address this issue. An evaluation approach based on distance from the average solution (EDAS) and TODIM (an acronym in Portuguese for interactive and multiple attribute decision-making) integrated with ABC analysis was used for sorting inventories based on five criteria. The standard deviation method was used for determines the weight. Each category set of values was determined by the TODIM and EDAS methods. Moreover, an illustrative figure is presented to compare the EDAS with TODIM, which helps the manager's systematic and scientific decision-making to swiftly identify the best-contributing product to prevent stock-outs and lower inventory costs.