A Study On Inventory Management Problems Of Firm A

Motivated by the operations problems of Firm A and using the theory of supply chain management,we analyze the characteristics of its customers and status of its production line,identify four problems in the firm's supply chain,namely,low accuracy of demand forecasting,unreasonable safety stock level,redundancy of materials coding and the long lead time of production.In fact,these problems lead to high safety stock level with high variability,and increasing dead stock.For the problems mentioned above,we develop three solutions to improve the inventory management of the firm.First,we improve the classification of the materials by ABC analysis,by considering the sales of the production and obtain nine categories of the materials.Second,taking an important product a,we employ the time series model –Holt model and Winters model,and improve the demand forecasting,thus efficiently improve the demand forecasting.Third,based on the service level of 90%,we provide the optimal safety stock level.Integrating the three solutions,we provide an efficient and feasible solution to the operations problems in supply chain of Firm A.