Inventory management : a hydraulic cylinder factory case study

Abstract

This thesis concerns to inventory management in a case study of a hydraulic cylinder factory. It aims to optimal inventory level in minimize cost and improve the inventory process to be high efficiency. This thesis study for all seven models in term of 144 parts. The factory found the shortage problem in high demand season and exceeds inventory stock at the end of the year. Because the inventory system is not suitable and the operator manage the control inventory level by their experience The first step uses ABC analysis for separate the unimportant items out of important items. The consideration of multi criteria makes more accuracy to classify how much they are effective with the cost and lead time period. To achieve in inventory control, group A use the method of ordering various items with one supplier to save the related ordering cost and Group B use fixed order quantity model to find the economic order quantity, safety stock, and reorder point. In group C, it is used min-max model to find the safety stock, target stock level, and order quantity. In order to maintain the system and to maximize the labor and equipment capacity, the new procedure of three main departments has been designed for each department. The related documents have been created to be more efficiency. For the improvement of inventory layout, that can saver the space than the old lay about 25%. From the study, a new inventory system for a hydraulics cylinder can save 2,007,036.28 Baht or 13.38% of total inventory cost.