Inventory management system : case of fast moving automotive service parts (original) (raw)
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Inventory Management-A Case Study
As a result to today's uncertain economy, companies are searching for alternative ways to stay competitive. This study goes through the process of analyzing the company's current forecasting model and recommending an inventory control model to help them solve their current issue. As a result, an Economic Order Quantity (EOQ) and a Reorder Point was recommended to help them reduce their product stock outs. The shortage of raw material for production always makes the process discontinuous and reduces the productivity. The ABC analysis technique for the inventory control system is first used to identify the most important multiple products and then the economic order quantity (EOQ) of each product is developed to find their inventory model equation individually.
Inventory Management Techniques: Optimizing Plant Operation in a Manufacturing Industry
International Journal of Computer Engineering in Research Trends, 2018
The main objective of this paper was to study the inventory management techniques and analyze the pros and cons of the existing technique and if needed, suggest a better-suited technique. The paper also sketches a background on the various costs involved and general inventory management techniques followed. The study uses a descriptive research design. The area of the study was a mechanical industry which produces valves, located in Chennai which is located in the Ambattur Industrial Estate. The inputs from the respondents were collected using a questionnaire and an interview guide. Secondary information was collected from different sources like; textbooks, internet, newspapers, magazines, and journals. The researchers obtained information from the staff and some clients who order directly from its premises. The sample size consisted of 50 respondents. The gender and age compositions of the respondents were established to eliminate any bias, in case of any. The results from the questionnaires and personal interviews were tabulated and analyzed and a relationship between the inventory management technique employed and performance was established based on the opinions of the respondents. A majority of the respondents agreed to positive relationship between the technique and performance of the company. A few respondents indicated inventory management as having a negative relationship on the performance. These same respondents believed that, inventory management involves a lot of costs, inconsistency as there is overcharging of customers, use of highly skilled workers in charge of managing inventories, theft, obsolescence among others all of which increase on the costs hence reducing much of the on the performance of the organization in question especially in the production department.
An Informative Literature Review on Inventory Control System
Journal of emerging technologies and innovative research, 2018
In supply chain management inventory control is a challenging problem. To fulfill customer demand , companies require to have sufficient inventories in stock meanwhile these inventories have holding costs and this is frozen fund that can be lost and burdens the company’s account. Therefore, the task of inventory management is to find the quantity of inventories that will fulfill the demand, avoiding overstocks. In the present paper , an attempt is made to provide an up-to-date and complete review of existing literature, concentrating on descriptions of the characteristics and types of inventory control models that have been developed by Indian as well as Foreign authors. KEY WORDS-Inventory Management, Survival, Working Capital, Liquidity and Profitability, models under uncertainty, EOQ, EPQ. INTRODUCTION The word inventory refers to the goods or resources used by a firm for the purpose of production and sale. Inventories include the matter, which are used as helpful materials to ea...
Case Study on Inventory Management Improvement
– Inventory management is a challenging problem area in supply chain management. Companies need to have inventories in warehouses in order to fulfil customer demand, meanwhile these inventories have holding costs and this is frozen fund that can be lost. Therefore, the task of inventory management is to find the quantity of inventories that will fulfil the demand, avoiding overstocks. This paper presents a case study for the assembling company on inventory management. It is proposed to use inventory management in order to decrease stock levels and to apply an agent system for automation of inventory management processes.
Basic Concepts in Inventory Management 2
In this chapter, the concept of inventory is discussed which is central to materials management function. The definition of inventory and various types of inventories -raw materials, finished goods, in-process inventory, MRO inventory, etc. -are outlined. The need to keep inventory and the functions of inventory as a decoupling agent to enable various subsystems in a supply chain to be decoupled are described. The inventory-related cost parameters are listed along with methods of estimating these. Other situational parameters like demand and lead times also need to be estimated. Before an inventory model is employed for optimal operation of the inventory system, an appropriate inventory policy has to be selected. Three types of inventory policies are described, and their relative strengths and weaknesses are discussed. A taxonomy of inventory models is presented to give an overview of a plethora of inventory models available in inventory management literature. However, the right choice of the inventory model is crucial for the success of inventory management.
Comprehensive approach to the inventory control system improvement
Management and Production Engineering Review, 2012
The methodology describes the optimal procedure for the application of basic analytical methods and tools in practice. The results of the analysis are in the algorithm linked to the subsequent actions realized to improve inventory management system and to minimize inventory level in the company. Described procedure is the result of methodology examination and verification in practical conditions of production enterprises. In the following sections of this paper, there are presented a comprehensive approach to the inventory analysis and the own algorithm, which contains 3 phases: inventory analysis on enterprise level, summary analysis of individual item groups and individual analysis of material items. In the last section, there are described examples of results from such analysis and conclusions. The presented approach is an attempt to create a universal procedure of analysis which integrates methods and tools described in various publications.
IntechOpen eBooks, 2024
Inventory management is pivotal for business performance and profitability. Efficiently handling inventory levels enhances operational efficiency and financial strategies. Poor management can result in financial losses, stock imbalances, delayed order fulfillment, and dissatisfied customers. This chapter discusses inventory management frameworks, focusing on objectives, techniques, and best practices. The primary goal is to balance overstocking and understocking, ensuring adequate working capital while optimizing costs. The chapter delves into various inventory management techniques, aiming to effectively control and manage inventory. It particularly sheds light on two pivotal techniques: Vendor-Managed Inventory (VMI) and Just-in-Time (JIT). VMI reduces inventory levels and improves fill rates, enhancing supply chain performance. On the other hand, JIT minimizes excess inventory and improves material flow. Both techniques present challenges and benefits. Accurate forecasting is highlighted as a best practice, aligning production with demand, reducing carrying costs, enhancing cash flow, and streamlining the supply chain. The literature is reviewed, emphasizing inventory management's role in the broader context of supply chain management.
Inventory management concepts and techniques
IOP Conference Series: Materials Science and Engineering
Inventory management has become one of the key elements of the supply chain management and can greatly affect the performance of a business. The textile industry is no exception. Traditional approaches in decision making based on manager instincts and hunches are no longer enough in the today's increasingly competitive environment. Small to medium sized family owned textile businesses are usually prone to this way of thinking. This paper discusses some basic concepts and techniques for classifying inventory, controlling inventory levels, avoiding stock outs and increasing customer satisfaction. It also discusses the importance of forecasting demand and uses the Root Mean Square Error (RMSE) as an effective measure of the forecast error, which later becomes a basic driver for inventory management. It addresses the Service Level (SL) as a performance metric and emphasizes on the importance of Safety Stock (SS). Finally, it discusses the use of the Reorder Point (ROP) as an efficient indicator for triggering production replenishment and proposes a simple technique for prioritizing production orders.