Inventory Management Based on the Multi-criteria Method of Decision Tree under Risk Conditions

The paper presents a study of decision-making process in the field of inventory management using the multi-criteria method of decision tree by example of a company engaged in distribution of luxury perfumery and cosmetic products. Within the framework of the research the following tasks were solved: 1. The company’s current performance was analyzed in terms of its position on the market of luxury cosmetics and perfumery, financial and economic indicators and logistics activities, 2. Theoretical aspects of decision-making in the field of inventory management under risk conditions were studied, 3. Features of the multi-criteria optimization methods application and the decision tree method in particular were examined, 4. A practical situation connected with entering the online market and coupled with many risks and uncertainty of consumers' demand was investigated; on the basis of the available data a multi-criteria optimization problem was formulated and solved with the help of the decision tree method, 5. A number of optimal solutions of the problem were given taking into account several possible requirements of a decision-maker, 6. The economic feasibility of the proposed solutions was estimated. Within the framework of the solution of the formulated multi-criteria optimization problem, a number of possible strategies were identified, which are the sequences of the company's possible actions in the context of the new project implementation. After solving the problem using the multi-criteria decision tree method, the optimal strategies based on the possible requirements of the decision maker were selected from the overall set of strategies. Analysis of the economic feasibility of the proposed solutions showed that, despite the existing uncertainty of demand, the proposed optimal strategies will bring the company a positive result in case of the proposed project implementation.