The Study On Materials Inventory Management Of DJ Company

Inventory management is an important business in production and operation of manufacturing enterprises. The inventory costs have occupied plenty of liquid capital of enterprises, so the level of inventory management affects the operating costs of enterprises directly, especially for the small and medium enterprises which have limited funds and storage space etc. So raising the level of inventory management and reducing the inventory costs become the urgent need of these enterprises to save the operating costs and regulate the management of enterprises.This paper takes DJ Company as research object, which is a small and medium manufacturer that produces artificial plants. According to the research, we find out some problems in inventory management of DJ Company: lack of scientific forecasting of material demand; methods of material classification are simple, lack of focusing on important materials; methods of ordering are simple, all materials adopt regular ordering method; a lot of idle and disqualified materials are existed; inventory quantity and cost are too high.For the above problems, this paper optimizes the inventory management of DJ Company from three aspects: demand forecast, material classification and inventory control model.First, we forecast the material demand of DJ Company with Mobile Equation Method, Cubic Exponential Smoothing Method and Winter Linear and Seasonal Exponential Smoothing Method. From comparing the results with the actual demand, we choose the forecast method that is most suitable for the materials demand characteristics of DJ Company.Then we classify the 13 kinds of materials of DJ Company with ABC Classification, and qualitatively put forward inventory control strategies to each type of material. Based on ABC Classification we introduce Kraljic Matrix classification, added to the consideration of risk. With this method, DJ Companys's materials are divided into four types: strategic type, lever type, bottleneck type and general type, and modified inventory control strategies are put forward.Finally, we introduce three types of inventory control model: EOQ Model, Random Inventory Control Model with Safety Stock and Dynamic Order Model with Multi-varieties. For each model we take a suitable material as example and calculate its order quantity, order cycle, safety stock, etc, and analyze the improvement from using the model.By researching and analyzing the inventory management of DJ Company, we identify its problems and reasons. Through a combination of quantitative and qualitative ways, we take appropriate measures to handle the inventory management problems, with the purpose of creating positive effects to the production and operation of DJ Company.