Abstract
ABC analysis, a very common practice used for managing inventory material. The methodology indicated the importance to classify the material by grouping inventory items into Class A, B and C in order to provide appropriate police to inventory management on each assigned class. The study demonstrates a comprehensive framework by applying the model of FAHP-TOPSIS (‘Technique for Order Preference by Similarity to Ideal Solution’), which is a distance-based approach to determine ideal and negative-ideal solution to ultimately achieve the ABC classification for inventory material. The proposed methodology is applied in a pharmaceutical company situated in Miaoli County, Taiwan. In the study, linguistic fuzzy is applied for determining criteria, Fuzzy AHP method (‘Analytic Hierarchy Process’) is used attempting to eliminate subjectivity during the weighing of multi-criteria; and since multi-criteria with conflicting attribute is taken into account in the case study, using TOPSIS provide the capability for its suitability to rank material into Category A, B, C.