IMPROVEMENT OF INVENTORY MANAGEMENT SYSTEM: CHEMICAL RAW MATERIALS FOR HEALTHCARE AND PERSONAL CARE PRODUCTS MANUFACTURER
Improving Inventory Management for a Personal Care Products Manufacturer
DOI:
https://doi.org/10.55766/sujst9969Keywords:
Economic order quantity model, Inventory, Silver-meal method, VED-FSN-SDE Matrix analysisAbstract
This research presents a case study examining the optimization of the inventory management system for a manufacturer of healthcare and personal care products within the fast-moving consumer goods (FMCG) industry. The study's objective is to enhance the inventory management process by employing the VED-FSN-SDE classification approach to prioritize and categorize items within an analytical framework. Following this classification, inventory management policies were established using the Economic Order Quantity (EOQ) model and the Silver-Meal heuristic method. The findings indicate that for the EFE category, where the variability coefficient (VC) was less than 0.2, the EOQ model was appropriate, resulting in a 27.42% reduction in annual inventory costs. For the DFD category, characterized by a VC greater than 0.2, the Silver-Meal heuristic method was applied, leading to a 35.99% reduction in inventory costs. These results demonstrate the effectiveness of the applied models in achieving significant cost savings and improved inventory efficiency. The practical implications of this study suggest that adopting tailored classification and control techniques can enable managers to optimize inventory levels, reduce costs, and enhance overall supply chain performance in the competitive healthcare and personal care products industry.
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