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Optimizing the Level of Inventory by Reducing Uncertainity in Production Management under Variable Demand

Author(s):

ARAVINDHAN N , RMK COLLEGE OF ENGINEERING AND TECHNOLOGY; VIGNESH R, IHD INDUSTRIES; SADASIVAN N, RMK COLLEGE OF ENGINEERING AND TECHNOLOGY; RAJESH K, RMK COLLEGE OF ENGINEERING AND TECHNOLOGY; KRISHNAKUMAR M, RMK COLLEGE OF ENGINEERING AND TECHNOLOGY

Keywords:

Variable Demand, Inventory Management

Abstract

The quantity of goods and materials on hand is termed as inventory. Optimization of inventory is a difficult task because excess inventory results in high cost and lower inventory results in stock outs. Inventory cost is reduced by forecasting the desired inventory with continuously varying demand. If the transportation cost is less than inventory cost, the inventory level can be separated with respect to production time. When transportation cost exceeds the inventory cost, the products can be purchased in large scale. So in order to reduce the rate of uncertainty a model is developed for managing the level of inventory. This model minimizes the inventory level as the raw materials are purchased at the production start time by knowing the availability of the production sources and it avoids production stoppages.

Other Details

Paper ID: IJSRDV3I1245
Published in: Volume : 3, Issue : 1
Publication Date: 01/04/2015
Page(s): 351-353

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