Inventory Model for a Case Study of Building Store in Khon Kaen Province

Abstract

             This research aimed to formulate the inventory model, which was the high value of a case study of building store, that was ordered from an industrial plant in Samut Prakran Province. Total inventory cost comprises ordering cost, holding cost and transportation cost. The demand of material A was forecasted by time series forecasting model. The best model was Linear Regression model gave the lowest of means absolute deviation. Then, the demand per month of a material A was able to forecast. Inventory management model was applied for material A to find the economic order quantity, ordering period and appropriate ordering frequency. The results indicated that there was statistically significant difference of average total inventory cost for material A of the current and the purposed inventory model. The average inventory total cost of purposed inventory model was lower than the average inventory total cost of current by 33.70%. In addition, there was statistically significant difference for the current and the purposed average inventory quantity of material A. However, the average inventory quantity of material A for proposed inventory model were lower than the current inventory quantity by 68.56%.