Determining Inventory Management Policy in Chemical Products Trading Business

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Itsanai Fungkiatpaiboon
Paveena Chaovalitwongse


In today’s world business, flexibility and agility are important to the rapid changes of consumers’ needs. The entrepreneurs have to improve themselves to catch up those needs on the basis of low costs but high profits. Consequently, adequate inventory to meet uncertain demand would be prior especially in trading business. The objective of this study is to determine inventory management policy by using demand forecasting method along with determining an appropriate ordering policy under uncertain demand and lead time. By applying Fixed Order Period System to set ordering policy as Full Container Order Quantity and Joint Order Quantity. In addition, this policy also test with 2 ordering scenarios; consolidate shipment and partial shipment. The study in chemical products trading business is illustrated empirically using a real case. The result shows that the proposed forecasting method along with Pareto analysis gives an average of 90% accuracy which is about 27% improvement. Besides the development ordering policy can reduce average inventory cost by 45% and still keep service level 99%.

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How to Cite
Fungkiatpaiboon, I., & Chaovalitwongse, P. (2018). Determining Inventory Management Policy in Chemical Products Trading Business. Thai Industrial Engineering Network Journal, 4(2), 14–20. Retrieved from
Research and Review Article


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