Reinventory management : a paint factory case study

Abstract

This thesis concerns to inventory management in a case study of paint factory. It aims to optimal inventory level and minimize cost in term of raw materials only with 28 types of raw materials. A paint factory faces with raw materials shortage in high season demand due to it use the intuitive and own experience judgment for control inventory level. The first step uses ABC analysis for separate the unimportant items out of important items. It’s using the simple linear casual model multiplicative seasonal model to forecast demand usage for one year in term of monthly for group A and B, for group C, forecast demand usage in term of quarterly. To achieve in inventory control, group A and B are used fixed order quantity model to find the economic order quantity, safety stock, maximum stock, and reorder point. In-group C, it’s used fixed time period model to find the safety stock, target stock level, and order quantity. For limited area, after using a new inventory system, it acceptable due to the area of all raw materials is less than the whole storage space area. From the study, a new inventory system for a paint factory can save 41.40 percent of total stocking cost.