Journal of Quality in Maintenance Engineering

Multi‐attribute classification method for spare parts inventory management

Marcello Braglia Andrea Grassi Roberto Montanari
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Marcello Braglia Andrea Grassi Roberto Montanari , (2004),"Multi#attribute classification method for spare parts inventory
management", Journal of Quality in Maintenance Engineering, Vol. 10 Iss 1 pp. 55 - 65
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Multi-attribute
classification method for
spare parts inventory
management
Marcello Braglia
Andrea Grassi and
Roberto Montanari
The authors
Marcello Braglia, is based in Dipartimento di Ingegneria
Meccanica, Nucleare e della Produzione, Università di Pisa, Pisa,
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Italy.
Andrea Grassi is based in Dipartimento di Scienze e Metodi
dell’Ingegneria, Università degli Studi di Modena e Reggio
Emilia, Reggio Emilia, Italy.
Roberto Montanari is based in Dipartimento di Ingegneria
Industriale, Università degli Studi di Parma, Parma, Italy.
Keywords
Inventory control, Analytical hierarchy process
Abstract
Inventory constraints, costs of lost production, safety and
environmental objectives, strategies of maintenance adopted,
logistics aspects of spare parts are some of the criteria taken into
account, and spare parts classification is thus defined with
respect to multiple attributes. In virtue of the large number of the
potential operational characteristics to be considered, the
decision diagram is integrated with a set of analytic hierarchy
process models used to solve the various multi-attribute decision
sub-problems at the different levels/nodes of the decision tree.
An inventory policy matrix is defined to link the different classes
of spare parts with the possible inventory management policies
so as to identify the “best” control strategy for the spare stocks.
The principles of the theory and an actual application in a
company operating in the paper industry are reported in the
paper.
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Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · pp. 55-65
q Emerald Group Publishing Limited · ISSN 1355-2511
DOI 10.1108/13552510410526875
55
Practical implications to the paper
This paper is motivated by the fact that, for several
production plants, the shortage cost incurred when a
spare part is needed but unavailable is frequently
dramatic. At the same time, the existing spare parts
inventory is excessive and could be reduced
significantly. Hence any improvement in the
management of this type of inventory is desirable
and useful in practice, leading to both improved
factory performance and reduced investment in
inventories. In spite of these considerations and
because of the complexity of this problem, there has
not been a great deal of research on managing spare
parts inventories, and few inventory models are
available in the literature. The goal of this study is
therefore to develop a decision support tool for use
by maintenance manager/staff that could be
implemented as an internal structured procedure of
the company and adopted as basic approach to revise
and validate the inventory policy used for each type
of spare part in an easy and fast way.
Introduction
The reliability and availability of industrial plants
represents a critical aspect in many modern
manufacturing and service organisations.
Increased efficiency of production plants requires
the minimisation of machines downtime. Spare
parts availability and its prompt accession is
among the major factors leading to a reduction of
the protraction of downtime when a breakdown
occurs. Thus, a logical approach to solving the
issue of spare parts availability lies in preserving
ample sizes of inventories of spare parts for
immediate disposition whenever needed. On the
other hand, stocking is limited by space and cost.
For these reasons, designing the reserve of spare
parts in an optimal way represents a critical and
important task for each production manager.
Briefly, the two main approaches followed to
develop a possible spares provisioning decision
model are (Huiskonen, 2001):
(1) Mathematical models.
(2) Classification approaches.
The first approach concerns the development of
mathematical models based on linear
programming, dynamic programming, goal
programming, simulation, etc. Similar approaches
have been examined extensively in the past and a
vast number of inventory models have been
developed during the last decades. Starting from
the multi-echelon technique for recoverable item
control (METRIC) model of Sherbrooke (1968),
several researches have been conducted including
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
more and more different aspects of the spares
management problem (see, for examples, the
overview of Kennedy et al. (2002)). These works
are generally concentrated on the mathematical
optimisation of the inventory costs and service
levels associated with a potential spares inventory
policy in terms of economic order quantity, reorder
point, safety stocks, and so on. Unfortunately,
most of these methodologies are either too
complex, abstract or oversimplified, thus reducing
their usefulness for a maintenance manager. In
addition, these models do not consider several
(intangible) additional factors such as
obsolescence, standard characteristics of the item,
type and quality of suppliers, etc.
The use of classification schemes as a spare
parts management tool represents a popular
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approach in industrial world. ABC-classification
according to the Pareto’s principle is the most well
known and used classification scheme to manage
the spare parts inventory management problems.
A criticality classification of spare parts is generally
based on administrative efficiency considerations
(such as inventory costs, usage rates, etc.) derived
from historical data of the company. The modern
production planning software packages (e.g. ERP)
are able to obtain similar analyses easily and with a
reduced time consuming operation. Based on
these analyses, oversized inventories, obsolescence
aspects or sock-out problems for the different
items are recognised.
Unfortunately, these approaches are based on a
one-dimensional (e.g. the classical ABC-analysis)
or a two-dimensional (e.g., Duchessi et al. (1988))
classification scheme that does not make it possible
to discriminate all the potential control parameters
of different types of items. To overcome this
limitation, some authors have developed new
multi-attribute classification models, which are
able to manage multiple factors which conflict with
each other and heterogeneous units (a unit of one
attribute cannot be compared directly with a unit
of another). As also reported in Huiskonen (2001),
Fuller et al. (1993) use a classification scheme
including six different criteria in their analysis. A
classification expert system model is proposed by
Petrovic et al. (1992). Availability of required
system, essentiality, price, weight and volume of
the item, market availability of the spares, and
efficiency of repair are the factors considered in
their model. Cohen and Ernst (1988) present a
general grouping method that can be used to
define group-based operational control policies.
Few works (de Almeida, 2001; Becker, 1987;
Gajpal et al., 1994; Sharaf and Helmy, 2001)
concerning application of multi-attribute decision
making (MADM) techniques for spares
classification can be also considered. Applications
56
Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · 55-65
of analytic hierarchy process (AHP) methodology
for spare parts classification are illustrated in the
papers of Gajpal et al. (1994) and Sharaf and
Helmy (2001). Attributes such as usage rate,
standard characteristics of spare, lead time of
supply, spare cost are considered in their models.
Becker (1987) and de Almeida (2001) propose the
use of the multi-attribute utility theory (MAUT)
to this purpose. Risk of item non-supply and spares
cost are the two criteria considered.
In this paper, a new MADM classification
model as a tool for spare parts inventory
management is proposed. The operative scheme is
based on the application of two different
techniques/methods: the reliability centered
maintenance (RCM), and the AHP.
It is known that RCM methodology provides a
practical and structured approach for arriving at a
satisfactory maintenance strategy for each
component/cause of failure of a given system. In
choosing a maintenance strategy, the methodology
takes into account several aspects such as safety
requirement, maintenance costs, costs of lost
production, quality problems, etc. Similar to the
decision making step in RCM analysis, the basic
idea of our procedure is to define a decision
diagram which guides the analyst towards the best
criticality classification for each type of spare part.
As in conventional RCM, for the choice of the best
class (i.e. the leaves of the decision tree), the
finding of the right answer to the questions/nodes
of the diagram is clearly crucial. This might be a
difficult and not trivial task in several industrial
applications because of questions without a unique
answer. Studies concerning the use to probabilistic
(Eisinger and Rakowsky, 2001) or expert system
(Fonseca and Knapp, 2000) approaches to
overcome this problem confirm the intrinsic
difficulties of RCM implementation.
When spare parts classification is considered,
the choice problem at each node of the diagram is
probably more complex and difficult than in
conventional maintenance selection. This is due to
the following considerations:
.
the choice at each node is rarely binary;
.
generally, more attributes must be considered;
and
.
most of these attribute are intangible.
To support the selection process of the analyst, and
to create a complete (i.e. able to manage several
potential spare control parameters), rational and
structured resolution approach, in our procedure
several AHP models are implemented and
integrated with each node of the decision tree. In
this way, numerous potential attributes influencing
the spares inventory management policy are taken
into account in an easy and rational manner but
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
without using over-complex and unmanageable
decision diagrams or AHP models.
The spare parts inventory management
problem
In industrial contexts, the spare parts inventory
management is generally based on the following
steps:
(1) A criticality analysis of the spare parts is
conducted (normally through a failure mode
effects and criticality analysis or FMECA).
This is generally necessary to obtain a first
reduction of the problem dimensions (i.e. only
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the most critical spares are analysed).
(2) An ABC analysis according to Pareto’s
principle of the most critical spares is carried
out to classify the different items. In this way a
second reduction of the items is obtained (i.e.
only the spare parts classified into the most
critical class will be considered in the next
step). The conventional ABC analysis
adopted by many firms, classifies the plant
components into three classes of criticality:
. very important (A-class);
.
important (B-class); and
.
less important (C-class).
Only the components belonging to class A
require management attention.
(3) Finally, an accurate re-definition of the stock
levels for the different spare parts in function
of the results of step 2 is executed.
It is evident from the decision process that the
criticality analysis/classification of the components
represents a fundamental aspect of the study. As
noted by Sharaf and Helmy (2001), thousands of
items may be potentially held in inventory by a
typical company, but only a small portion of them
deserve management’s close attention and
accurate control.
The classification of spare parts is frequently
based on a single criterion. The most frequently
adopted is the annual cost usage, which can be
calculated in the following manner:
annual cost usage ¼ annual usage rate
£ dollar value per unit:
To support the final definition of the inventory
policies in real industrial situations, a crossed
analysis is also conducted considering an
additional ABC analysis concerning the historical
stock levels recorded for the different items. In
other words, a matrix “consumption/inventory
level” can be realised (Table I).
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Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · 55-65
Table I “Consumption-inventory” matrix
Inventory level
Consumption A B C
A Just-in-time OK
B
C Reduction or elimination of stocks Not important
As shown in Table I, in the squares of the matrix
the corresponding inventory management policy is
reported. For example, for a spare characterised by
low consumption rate (C-class) does not justify an
high level of inventory (A-class). The management
policy of the stocks for these kinds of spare
components is not optimised and must be revised.
Obsolete items are typical of this situation.
The best components are characterised by high
use and low inventories. In this case changes in
management policy are not generally required.
Spares with low utilisation and low inventories
are considered to be of low importance. Only
obsolescence/deterioration problems must be
carefully taken into account for this type of item.
The spares with high inventories and high
consumption rates represent the most important
case. A careful revision of the safety stocks, reorder
points and order quantities is generally required so
as to attempt to reduce the stocks. In particular, for
the items that are already characterised by low
safety stocks, improvements can be obtained
adopting the just-in-time paradigms.
As one can note, only quantifiable factors are
taken into account during these standard types of
analysis: item costs, usage rate, and historical
inventory levels. Unfortunately, other attributes
concerning more intangible aspects such as safety
objectives, provisioning characteristics, type of
maintenance adopted, loss of production, etc. are
generally neglected due their intrinsic difficulties
of quantification. For this reason, research
addressing the development of more complete
methodologies and making it possible to take into
account more potential (and intangible) factors
influencing the spare parts classification/inventory
strategies, is desirable and useful in practice.
Multi attribute spare tree analysis
(MASTA)
The MASTA approach is based on two successive
steps. In the first MASTA recognises four spare
part classes of criticality and use a logic tree to
screen provisioning methods. In the second step,
the four classes are crossed with possible different
inventory management strategies, so as to obtain a
“inventory management policy” (IMP) matrix.
Based on this matrix, the most appropriate strategy
 Multi-attribute classification method for inventory management Journal of Quality in Maintenance Engineering
Marcello Braglia, Andrea Grassi and Roberto Montanari Volume 10 · Number 1 · 2004 · 55-65

for each item can be derived. This two-step AHP structures, a mode of quantification is
approach ensures consistency in determining how proposed and shown below. Using these evaluation
to perform inventory management on all types of judgements as a basis, the pairwise comparisons of
facility equipment. the alternatives (e.g. critical, important and
desirable) with respect to each spare can be
conducted in an easy and quick manner:
Spare parts classification (1) Spare parts plant criticality
As in conventional RCM approach (Eisinger and .
Quality problem:
Rakowsky, 2001), many different decision diagrams
– Critical: quality yield [ [0% 4 85%]
can be potentially proposed for use in spare parts
classification. In this paper, a particular decision – Important: quality yield
diagram developed in a company operating in the [ [85% 4 95%]
paper industry context is presented. The – Desirable: quality yield
importance of the determination of the appropriate [ [95% 4 100%].
stocking level of spare parts in this field, and of the .
Production loss:
number of machine tools that should be carried as
– Critical: productive yield
spares in the operation of a large paper mill, it has
[ [0% 4 90%]
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already been underlined by Dhakar et al. (1994).

Figures 1-3 show the logic tree used to – Important: productive yield
determine the best class of criticality for each spare [ [90% 4 97%]
of facility equipment. – Desirable: productive yield
The decision problem at each node of the [ [97% 4 100%].
diagram is supported/executed by using an AHP .
Domino effect:
model. A brief description of AHP functioning is – Critical: global productive effect (many
reported in Appendix 1 and a numerical example
productive parts are involved)
of AHP-node evaluation concerning a bearing
spare part is shown in Appendix 2. The block – Important: limited productive effect
diagrams of the four AHP models adopted are (limited productive parts are involved)
reported in Figure 4. As one can see, all the models – Desirable: no domino effect.
are quite simple but nevertheless make it possible .
Internal safety and environmental:
to consider each decision problem in a more – Critical: one or more fatality
complete and rational way. A total of 17 different
attributes are considered at the end of the selection – Important: one or more seriously
process. This is a more extended number than in injured
the previous researches cited above. – Desirable: one or more productive
As suggested in Gajpal et al. (1994) and Sharaf parts are damaged.
and Helmy (2001), for each criterion of the different .
External safety and environmental:

Figure 1 A sub-tree explosion

58
 Multi-attribute classification method for inventory management Journal of Quality in Maintenance Engineering
Marcello Braglia, Andrea Grassi and Roberto Montanari Volume 10 · Number 1 · 2004 · 55-65

Figure 2 A sub-tree explosion

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Figure 3 A sub-tree explosion

– Critical: large environmental – Important: setting time device [ [0.5

contamination (water table 4 1.0] lead time
contamination, ecosystem mutations, – Desirable: setting time device $ lead
etc.), ineffective environmental work time.
reclamation .
Cannibalism:
– Important: environmental restoration – Critical: it is not possible replace the
by work reclamation parts with a similar removed by the plant
– Desirable: no environmental – Important: it is possible replace the
contamination. parts with a similar removed by the
(2) Spare supply characteristics: plant but it is not advisable
.
Masked time: – Desirable: it is possible replace the
– Critical: setting time device , 0.5 lead parts with a similar removed by the
time plant without side effect.
59
 Multi-attribute classification method for inventory management Journal of Quality in Maintenance Engineering
Marcello Braglia, Andrea Grassi and Roberto Montanari Volume 10 · Number 1 · 2004 · 55-65

Figure 4 AHP models adopted in decision diagram nodes

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.
Lead time: – Desirable: price part , $1,000.
– Critical: .¼ four months
.
Space required:
– Important: . one month and , four – Critical: space required part . 10 per
cent available space
months
– Important: space required part [
– Desirable: , four months.
[1% 4 10%] available space
.
Number of potential suppliers:
– Desirable: space required part , 1 per
– Critical: only one supplier in the world
cent available space.
– Important: # five suppliers in your .
Obsolescence:
country
– Critical: MTBF . mean time between
– Desirable: . five suppliers in your new version
country.
– Important: MTBF , mean time
.
Internal repair possibility cost:
between new version
– Critical: internal repair cost .
– Desirable: no obsolescence.
substitution cost .
Deterioration problems:
– Important: internal repair cost [ [0.5 – Critical: ratio price/expiration time . 5
4 1.0] substitution cost per cent spare parts budget
– Desirable: internal repair cost , 0.5 – Important: ratio price/expiration time
substitution cost. [ [1% 4 5%] spare parts budget
(3) Inventory problems:
– Desirable: ratio price/expiration time
.
Price:
, 1% spare parts budget.
– Critical: price part . $25,000 (4) Usage rate:
– Important: price part [ [$1,000 4 .
Number of identical components in the
$25,000] plant:
60
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
– Critical: more than ten
– Important: between 2 and 10
– Desirable: Only one in the plant.
.
Redundancies:
– Critical: no redundancy
– Important: multiple redundancy
– Desirable: simple redundancy.
.
Frequency of failure:
– Critical: high
– Important: moderate
– Desirable: low.
As reported previously, the structure of the decision
diagram, the AHP models and the quantification
modes presented in this sub-section arise from the
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actual application described in the next paragraph
and concerning a paper industry case-study. This
means that to obtain an effective and useful decision
support system (DSS), the framework of the
method has been developed following suggestions
obtained from interviews/suggestions of
maintenance staff and production managers of the
firm. But as one can note, the approach philosophy
has a general validity for the utilisation in different
industrial contexts. Nevertheless, changes in the
proposed procedures are admissible to fit the
particular user necessities and/or requests.
Inventory management policy matrix
The IMP matrix represents a good support to plan
the inventory management policies since it makes
it possible to identify the strategy in function of the
criticality class of the item. Table II shows the IPM
matrix developed in our case study following the
ideas and suggestions of company maintenance
experts.
As one can see, in terms of inventory, each
equipment spare is assigned to one of four possible
strategies:
(1) No stock – under a MASTA program,
unavailability of a spare is a conscious decision
reached after analysis of what facility
function(s) would be affected by the absence
of the spare in case of failure versus the cost/
problems sustainable to have an immediate
availability of the item.
Table II Inventory management policy matrix
Spare part classification
Inventory policy A B C D
No stock X X
Single item inventory X X
Just-in-time policy X X
Multi item inventory
Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · 55-65
(2) Single item inventory – this is the most basic
approach. Considerations concerning the risk
of unavailability for the plant, the capacity to
prevent failure time with appropriate
maintenance policies, inventory problem and
supply characteristics lead toward the stock of
a single unit of the spare part.
(3) Just-in-time policy – this is the most desirable
approach. In spite of the potential critical
consequences for the plant of an unavailability
of the item, considerations about the easiness
and velocity of supplying, the good “control”
of failure phenomenon with appropriate
maintenance policies and the problems of
storage (i.e. cost, space, etc.) lead toward the
absence of inventory. This is mainly due to the
high level of integration between customer
and supplier which makes it possible to obtain
quick and reliable supplying in cases of failure.
(4) Multi item inventory – this expensive strategy is
mainly due to the high critical impact of an
unavailability of the spare on the performances
(cost, quality) and safety of the plant.
Difficulties in spare provisioning do not allow a
just-in-time strategy of supplying to be used.
A case study
The results of the methodology application in a
paper industry is now presented. The equipment
analysed concerns a plant working in tissue
production and converting. In particular, the plant
is organised as follows:
.
a continuous processing plant for paper
production directly from pure cellulose;
.
three converting lines for tissues production;
. one converting line for kitchen paper; and
.
one converting line for toilet paper.
The continuous production process works seven
days a week The converting department works six
days a week, 24 hours a day.
In terms of spares inventories, more than
10,000 articles must be potentially managed. In
practice, about 7,500 different components are
stocked in the warehouse for a value of more than
two million of dollars. The basic inventory policy
adopted is based on the EOQ theory which makes
it possible to obtain low risks of stock-out but with
high levels of inventory.
To reduce the dimension of the problem, a pre-
analysis has been conducted to recognise the most
“critical” spares. In this case the pre-screening has
not be based on a FMECA approach, but on a
crossed ABC analysis concerning the historical
stock levels recorded for the different spare
X components. In particular, the two ABC analyses
61
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
have been based on slow moving and dead stock
concepts.
With slow moving items we refer to the spares
which have not been used for a pre-defined given
period (five months). This concepts is shown in
Figure 5.
With dead stock items we refer to the spares
characterised by a level of inventory which has
never gone under a pre-determined level (dead
stock) in a given interval of time (generally two
years). This concept is shown in Figure 6.
The 1,600 spare components (20 per cent of the
total) classified contemporarily in A-class in terms
of slow moving and dead stock are defined as
“critical” (Figure 7) and subsequently analysed
with the MASTA approach.
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Briefly, the results of the MASTA application
were the following:
Figure 5 Slow moving concept
Figure 6 Dead stock concept
Figure 7 Critical spares
62
Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · 55-65
.
85 items are now managed following JIT
philosophy;
.
the single inventories of 52 items have been
eliminated; and
.
for 61 items the average stock levels have been
considered too high and, as a consequence,
reduced. For some of these spares the stock
has been reduced to a single item.
The monetary amount of this reduction can be
quantify in more than 100,000 dollars. This
reduction is mainly due to the (general) electrical
components (65-70 per cent), followed by
mechanical components of the tissue production
lines.
Finally, only to test the goodness of the effected
choices in terms of plant service level, a simple
simulation study has been conducted. In other
words, based on managerial data of the company,
we have simulated the failures that occurred in the
last five years, assuming the new inventory
configuration was used instead of the old one.
Imposing the costs per hour for a downtime of the
different lines (e.g. 4,000 dollars/hour for the most
expensive continuous process), and estimated the
average lead time provision (in emergency
condition), we have analysed the expected costs for
production loss due to the protraction of downtime
when a breakdown occurs and spare part is not
immediately available. The analysis shows only
one stock-out occurrence more than in old
inventory situations for an estimated additional
cost of about 20,000 dollars.
Conclusions
The spare parts inventories management in
industrial plants represents a very complex
problem due to the difficulties concerning data
collection, the number of factors to be considered,
and the large amount of the items involved. A new
multi-attribute technique to define the “best”
strategies of spare inventories management is
presented. The methodology is based on two
instruments. First, similarly to RCM analysis, a
decision diagram drives the analyst towards the
best criticality classification of the items through a
set of decision nodes. To help the analyst during
the choice in each node, several (reduced) AHP
models are proposed. Second, to join an
appropriate inventory strategy to each class, an
inventory management policy matrix is developed.
In this way, a rational and complete analysis can be
quickly conducted considering up to 17 possible
attributes influencing the spares inventory
management policy.
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
The different aspects of the methodology
framework have been defined following the
suggestions of the maintenance experts of an
international company operating in the paper
industry. However the model maintains a general
validity and modifications of the suggested
procedures are possible for a different use/
industrial context, without altering the basic
“philosophy” of the approach proposed.
Based on our experience, we can affirm that the
use of AHP methodology is a valid alternative
approach to solve the problems of decision making
step in RCM procedure, and it represents the first
such proposal, as far as the authors know, to
appear in the literature. It is evident that, as a
possible future study, the integration between
AHP technique and decision diagrams could be
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tested also in the original version of RCM (i.e. to
select the “best” maintenance for the different
causes of failures).
References
Becker, A.J. (1987), “The scaling of repairable spares”,
Maintenance Management International, Vol. 6 No. 1,
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Appendix 1. The analytic hierarchy process
The AHP (Saaty, 1980, 1982, 1990) is a powerful
and flexible multi-criteria decision making tool for
complex problems where both qualitative and
quantitative aspects need to be considered. The
AHP helps the analysts to organise the critical
aspects of a problem into a hierarchical structure
similar to a family tree. By reducing complex
decisions to a series of simple comparisons and
rankings, then synthesising the results, the AHP
not only helps the analysts to arrive at the best
decision, but also provides a clear rationale for the
choices made.
Briefly, the step-by-step procedure in using
AHP is the following:
(1) Define decision criteria in the form of a
hierarchy of objectives. The hierarchy is
structured on different levels: from the top
(i.e. the overall objective) through
intermediate levels (criteria and sub-criteria
on which subsequent levels depend) to the
lowest level (i.e. the alternatives).
(2) Weigh the criteria, sub-criteria and
alternatives as a function of their importance
for the corresponding element of the higher
level. For this purpose, AHP uses simple
pairwise comparisons to determine weights
and ratings so that the analyst may
concentrate on just two factors at the same
time. The verbal judgements are then
translated into a score via the use of discrete
nine-point scales (i.e. Equally ¼ 1,
Moderately ¼ 3, Strongly ¼ 5,
Very strongly ¼ 7, Extremely ¼ 9).
(3) After that the judgement matrix has been
developed, to calculate a priority vector to
 Multi-attribute classification method for inventory management
Marcello Braglia, Andrea Grassi and Roberto Montanari
weigh the elements of the matrix. This is the
normalised eigenvector of the matrix.
(4) Evaluate the goodness of judgements with the
inconsistency ratio IR. This is a peculiarity of
the AHP technique. Before determining an
inconsistency measurement, it is necessary to
introduce the consistency index CI of an n£ n
matrix (of judgements) defined by the ratio:
lmax
n
CI ¼
n
1
where lmax is the maximum eigenvalue of the
matrix. Then, IR is defined as the ratio:
CI
IR ¼
RI
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where RI is the corresponding average random
value of CI for an n£ n matrix. The values of
RI are shown in Saaty (1980) (e.g. for n ¼ 3
we have RI ¼ 0:58, etc.). The judgements can
be considered acceptable if IR # 0.1. In cases
of inconsistency, the assessment process for
the inconsistent matrix is immediately
repeated. An inconsistency ratio of 0.1 or
more may warrant further investigations.
After its introduction by Saaty (1980), AHP has
been widely used in many applications (Vargas,
1990). The AHP was developed more than 20
years ago and continues to be the most highly
regarded and widely used decision-making
technique.
The AHP approach is characterised by some
important properties:
.
Such a technique makes it possible to tackle
the problem in a complete and thorough way,
taking several factors into account. This
capacity is more difficult to obtain when using
conventional methodologies such as ABC
analysis or mathematical approaches (see, for
example, multi-echelon models).
.
It must also be considered that the AHP is
able to manage a large number of possible
alternatives in an efficient way.
. A direct quantitative judgement of the relevant
factors is not required by the maintenance
manager. The pairwise comparisons can be
preferred by the decision-maker when
intangible criteria have to be treated as is the
case with spare parts criticality classification.
In addition, the coherence of experts’
judgements can be validated by using the
inconsistency ratio. However, one can note
that, if reliable quantitative judgements are
available for some criteria, they can easily be
included in AHP analysis.
. The robustness of the approach can be
evaluated performing a sensitivity analysis.
64
Journal of Quality in Maintenance Engineering
Volume 10 · Number 1 · 2004 · 55-65
.
The AHP procedure is readily available in
decision-making software packages from
several commercial software sellers.
Appendix 2. A numerical example of AHP
evaluation
A brief numerical example concerning a bearing-
criticality-class determination in the usage-rate
node of MASTA approach is here reported.
As one can see in Figure 4, three different
attributes (the number of identical parts in the
plant, the redundancies, the frequency of failure)
are considered and three are the criticality classes
that are taken into account (desirable, important,
critical). In Table AI the pertinent bearing data for
the three attributes are reported.
In order to determine the bearing-criticality-
class adopting the AHP approach, the main steps
to be followed are:
(1) Calculate a square, reciprocal symmetric
matrix whose elements are pairwise
comparisons of attribute with reference to the
usage rate. This matrix is carried out by a
questionnaire compilation of an experts
committee (Table AII).
(2) Compute and normalise the principal engine
vector of the previous matrix (see Table AII).
(3) Calculate the pairwise comparison matrixes
for the criticality classes for to each attribute
and compute the corresponding the principal
engine vectors. As the previous matrix, these
are carried out by a questionnaire compilation
of an experts committee (Table AIII).
(4) Compute the composite weights (W(i) C ) for
each attribute “i” and utilise them for the
absolute measurement of the bearing
criticality (Table AIV).
(5) Define the boundary conditions for the usage
rate classification. When the number of
identical parts in the plant is “only one in the
plant” (WCð1Þ ¼ 0:159) and when the
redundancy is “simple redundancy”
(WCð2Þ ¼ 0:138) the bearing is classified as
“Desirable” even if its frequency of failure is
“moderate” (WCð3Þ ¼ 0:066). This
represents the lower boundary condition of
the desirable-usage-rate classification and its
numerical value is computed as the total of the
Table AI Bearing attributes data
Attribute
Number of identical parts in the
plant Redundancies Frequency of failure
30 No redundancy Moderate
 Multi-attribute classification method for inventory management Journal of Quality in Maintenance Engineering
Marcello Braglia, Andrea Grassi and Roberto Montanari Volume 10 · Number 1 · 2004 · 55-65

Table AII AHP judgement matrix for the attributes

Number of identical Frequency Normalised
Attribute parts in the plant Redundancies of failure engine vector
Number of identical parts in
the plant 1 1 1/2 0.25
Redundancies 1 1 1/2 0.25
Frequency of failure 2 2 1 0.5

Table AIII AHP judgement matrix for the criticality classes

Class Desirable Important Critical Normalised engine vector
Number of identical parts in the plant
Desirable 1 3 4 0.634
Important 1/3 1 1 0.192
Critical 1/4 1 1 0.174
Redundancies
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Desirable 1 2 3 0.550
Important 1/2 1 1 0.240
Critical 1/3 1 1 0.210
Frequency of failure
Desirable 1 3 2 0.547
Important 1/3 1 2 0.263
Critical 1/2 1/2 1 0.190

Table AIV Composite weights for attribute and criticality-class combinations

Criticality-class Composite weights
Attribute Attribute weights Desirable Important Critical Desirable Important Critical
Number of identical parts in
the plant 0.250 0.634 0.192 0.174 W(1)
C 0.159 0.048 0.044
Redundancies 0.250 0.550 0.240 0.210 W(2)
C 0.138 0.060 0.053
Frequency of failure 0.500 0.547 0.263 0.190 W(3)
C 0.137 0.066 0.048

above three composite weights Table AV Usage rate boundary conditions

WC(1)+WC(2)+WCð3Þ ¼ 0:363. Clearly
when the number of identical parts in the
plant is “only one in the plant”
(WCð1Þ ¼ 0:159), when the redundancy is
“simple redundancy” (WCð2Þ ¼ 0:138), and
when frequency of failure is “low”
(WCð3Þ ¼ 0:137) the bearing is classified as
“Desirable” too and its desirable-usage-rate-
classification value is the desirable-usage-rate
upper bound WC(1)+WC(2)+
WCð3Þ ¼ 0:434. When the frequency of
failure is “high” (WCð1Þ ¼ 0:048) and when
the redundancy is “no redundancy”
(WC(2)¼0.053) the bearing is classified as
“critical” even if the number of identical parts
in the plant is “only one in the plant”
(WCð3Þ ¼ 0:159). This represents the upper
boundary condition of the critical-usage-rate
classification and its numerical value is
computed as the total of the above three
composite weights WC(1)+WC(2)+
WCð3Þ ¼ 0:260. Evidently, when the number
of identical parts in the plant is “more then
Usage-rate classification Critical Important Desirable
Composite weights 0.145 0.260 0.261 0.362 0.363 0.434
ten” (WCð1Þ ¼ 0:044), when the redundancy
is “no redundancy” (WCð2Þ ¼ 0:053), and
when the frequency of failure is “high”
(WCð3Þ ¼ 0:048) the bearing is classified as
“critical” too and its critical-usage-rate-
classification value is the critical-usage-rate
lower bound WC(1)+WC(2)+
WCð3Þ ¼ 0:145. The boundary conditions for
the usage rate classification can therefore be
specified as reported in Table AV.
(6) Compute the bearing total composite weight
and define the bearing-usage-rate-
classification value. From the bearing data of
Table AI (WCð1Þ ¼ 0:044; WCð2Þ ¼ 0:053;
WCð3Þ ¼ 0:066) the bearing total composite
weight is WC(1)+WC(2)+WCð3Þ ¼ 0:163.
Comparing this value in Table AV the bearing-
usage-rate classification is obtained. In
particular, for this case, the final classification
is judged as “critical”.

65
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