Application & Development of Selective Inventory Control Model in Paper Industry

Inventory is a necessary evil. On the one hand it is required for the smooth production run and on the other hand it is also known as "Cancer of Industry", “Graveyard of Business", "Corporate Obesity" and "a national problem". Inventory Control is today the major profit center. This paper aims at the application of deterministic inventory control models in a paper industry for Raw Materials & Boiler Fuels where the raw material is processed continuously through various systems. Though a number of policies are available in literature to handle inventory control situations but in paper industry, which is a big, complex and a material intensive industry, where it is difficult to control the inventory by any of the existing policies, a combination of some of the available techniques in addition to innovative control policy has been applied. The objective of the paper has been to select an appropriate policy, formulate a model and to determine its optimal solution mathematically. It was felt in the beginning of the study that improved policies could be developed only through a better understanding of the working of the existing supply and inventory management system.