Risk assessment model in inventory management using the AHP method

Abstract

<jats:p>Abstract: Identification and hierarchy of risks in inventory management allow mapping and generating a plan of actions in order to control them, diminish them or even extinguish them. This research aims to identify and measure the degree of importance of the main problems encountered in the sector of a metal production chain. The method used to develop this research is the Analytic Hierarchy Process (AHP), in order to hierarchize and thus defines the best way to manage risks. The main results of this study reveal that each area of the organization presents a risk that stands out in the management of inventories, allowing the company to control its expenses better, aligning itself with the companies' strategy of producing at the lowest cost. Excess consumption (demand), supplier delay (supply), and stock divergence (material handling) were highlighted as the major risks in their categories. This study revealed that in the category of demand risks, excess consumption was identified as the most critical risk, in the supply category, the supplier delay was identified at the highest risk and finally in the material handling category, the risk divergence of inventory obtained the highest percentage in relation to the other problems.</jats:p>

Prevention of Financial Risk: Cash and Inventory as a Catalyst for Working Capital Management for Lifelong Learning of Small-Scale Operators

“…Althaqafi (2020) discovered that inventory management has a substantial association with a company's profitability, implying that effective inventory management leads to greater profitability, whereas poor management leads to poor financial performance. According to Sales et al (2020), each component of the business provides a risk that is particularly visible in inventory management, allowing the organisation to better control its expenditure and aligning itself with the company's objective of producing at the lowest possible cost. The conceptual framework of the study is given in Figure 1.…”

Supply Chain Risk Analysis and Assessment Using Analytical Hierarchy Process (Ahp): A Review

“…Susanawati et al [23] proposed a discussion with experts in the related supply chain for risk identification. The experts related to the supply chain can be market players or employees that involve in the supply chain operation [9]. A discussion group can also be created to identify risks using experiences, knowledge, and personal judgment [17,18].…”

“…The identified risk in the supply chain could be mitigated based on the level of occurrence probability and severity impact. The most relevant risk could be identified by using a risk assessment [9]. Then, the risk can be managed based on the priority order.…”

Analytical hierarchy process: revolution and evolution

“…These advantages have led to the widespread use of AHP in business, science, healthcare, and education for applications from human exploration of Mars (Tavana, 2004(Tavana, , 2006 to selection of new production facilities (Ishizaka & Labib, 2011b), organizational evaluation (Ghamari et al, 2017), forest management (Darvishi et al, 2020;Zandebasiri & Pourhashemi, 2016), software selection (Mahmudova & Jabrailova, 2020), economic assessment (Wang & Deng, 2020), inventory management (Pérez Vergara et al, 2020;Sales et al, 2020), food safety assessment (Chaiyaphan & Ransikarbum, 2020), road selection (Han et al, 2020), sustainability assessment (Zand et al, 2020), tourism management (Çavmak & Çavmak, 2020), and environmental mapping (de Jesus França et al, 2020) among others.…”