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Improving the efficiency of ordering policy: An application in a class-A spare part
Author(s)
Temiyasathit, C.
Jangsetthagul, N.
Date Issued
November 18, 2014
Type
Conference Paper
Abstract
Statistical analysis of inventory data has been widely used to investigate the behavior of demand, the order execution and the delivery data in business industry. The analysis benefits the supplier in many ways. This study focuses on statistical analysis of spare part management of Water Purifier's electronic modules. The challenge of this demand prediction is that the electronic modules have random failure as well as an uncertain delivery lead time and delivery quantity. Without implementing the ERP system, the spare part ordering policy is an intuitive-based order. The present study investigates the suitable forecasting method for electronic module in after-Sales service department in Thailand. A study of probability distribution is incorporate in order to define sample probability distribution of uncertain delivery lead time and quantity. The new ordering policy based on a defined probability distribution is proposed to facilitate the elimination of intuitive-based ordering system, minimize the stock level, and improve the inventory management and control strategy. The results with real inventory data showed that our proposed policy achieved satisfactory stock level as well as significantly reduce inventory cost while maintain a high customer service level.
Citation
IEEE International Conference on Industrial Engineering and Engineering Management, 1243-1247, 2014