Study On Inventory Management Of Electrical Equipment Company

As far as management for materials of enterprise is concerned, in order to reduce storage quantity, save funds, and reduce costs for storage and procurement of materials, economic batch quantity method is regularly used to perform the order quantity of material and control of storage quantity. However, in practical application, the effect for the above method is not evident resulting from difficulty to determine the storage cost as well as complexity and variety of production & operation condition of the enterprise and market situation.This article has analyzed the potential problem of the storage strategy by beginning with the current condition of inventory management of electrical equipment company, and by analyzing order model of unsafe reserve ration, the composition of various expenses of total stock cost shall be analyzed by using the statistical method so as to prove that unit reserve cost of material is not always a constant. Under most situations, reserve cost can be divided into two parts, including the fixed cost and variable cost. Therefore, suppose the presupposition of economic batch quantity model not to be completely established, its calculating formula shall be needed to be modified. On the basis of this analysis, this article has modified the economic batch quantity model, in which the general form of calculating formula for economic order quantity has been derived. That is, from special formThe general form has been derived as follows:in which: EOQ-Economic order quantityD-Annual consumption of certain material of the enterpriseS-Order expense for each timeH-Annual storage cost per unit materialb-Variable storage cost per unit material Namely, the economic order quantity has relationship only with variable part ofstorage cost, annual consumption of materials, and order expense for each time. This is a general form of the economic order batch quantity formula, which is more suitable for practical situation so as to improve the application effect of economic batch quantity method in management of materials.Then, this article has applied the general form of calculating formula for the economic order batch quantity in the situation with quantity discount, situation of supplementing as consuming, and situation with safe reserve, so as to adapt to various situations of material management of the enterprise.At last, this article considers that the practical situation for production and business, during the management practice, must be combined. The management theory shall be flexibly utilized to serve the socialist economic construction cause. So we must adjust, according to concrete situation, to be more suitable for objective reality when we apply the economic batch quantity method.The electric equipment company determines order with the general economic batch quantity formula, which has been proven to confirm to production reality, and obtain good economic effect through one-year practical operation of 2001. The reserve cost of as much as more than 9 million RMB yuan were saved in the whole year, among which the reserve cost of one material (washing finished coal) of more than 800 thousands RMB yuan were saved.Through discussion and practical application of the article, application range and effect for the economic batch quantity method which is conventional strategy method for stock, have been improved, and more effective strategy methods to reduce stock cost and improve economic benefits have been provided.