Material planning and inventory management

The management of raw material at Blue Brick in Singapore is costly as the company is forced to pay for external storage when the ports' time allowance runs out. A new ordering policy of (Q, R) continuous review model with forecast demand is developed to reduce inventory in the external warehouse. The policy parameters of four most commonly used paperboards are determined and simulations based on historical demand data are run to evaluate the policy. A simulation with Crystal Ball is also run to prove the efficacy of the (Q, R) method. Both the theoretical and simulation results suggest that the new ordering policy satisfies the stock-out requirement and ports' inventory day requirement. Thus Blue Brick can eliminate the four common paperboards' inventory in the external warehouse. Moreover if the forecast errors of other paperboards have the same levels as the ones of the four common paperboards, Blue Brick could eliminate all the inventories in the external warehouse.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Mechanical Engineering.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2008

Author dc:creator

• Han, Dafei

Advisor dc:contributor.advisor

• Stanley B. Gershwin.

• Mechanical Engineering.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/46157

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/46157