Inventory Management Case Study Of Plastic Lamp Manufacturer

Abstract

        The controlling and storing of the optimised number of inventory is a part of the effective inventory management which can lead to higher level of costs and storages management within the firm. This is a cooperative research with BTP industries co. ltd. to analyse inventory, raw material storage, raw material usage information, raw material purchasing, and the past one year of inventory. In the past one-year period, there were 517 items in the inventory which can be separated into 2 groups; fast-moving inventory accounted for 221 items and non-moving inventory accounted for 296 items. In order to manage these non-moving inventory, we separated moving inventory from non-moving inventory by restructuring the placement of each group in the storage then selecting items from the non-moving group and selling back 110 selected items which valued 956,518 Baht accounted for 36.91% of non-moving inventory. Moreover, by selling up to 110 items were able to free 37.16% of the space in the storage. Furthermore, we used the ABC Analysis Technique to analyse and categorise the fast-moving inventory by prioritising annual usage value in calculation. As a result, there were 39 items categorised in Class A. By tracking average demand rate, lead time, and standard deviation of demand rate in order to recalculate the reorder point (ROP), the firm could lower the excess inventory purchasing and free up the storage which resulting in 25.95% reduction in value of the inventory that valued 1,605,764 Baht

Keywords : Inventory Management, Inventory Improvement, ABC Analysis