What is Imperfect Quality Items

Data mining is a technique to identify valid novel, potentially useful, and understandable correlations and patterns in existing data. Data mining techniques, such as clustering, association rule mining, classification, and sequential pattern mining, have attracted a great deal of attention in the information industry and in society as a whole in recent years. Some research studies have also extended the usage of this concept in inventory management. Yet, not many research studies have considered the application of data mining approach on determining both optimal order quantity and loss profit of frequent items. This helps inventory manager to determine optimum order quantity of frequent items together with the most profitable item for optimal inventory control. In this chapter, two different cases for determining ordering policy and inventory classification based on loss rule are presented. An example is illustrated to validate the results.