Research On Safety Stock Setting For TQ In The Supply Chain Environment

Inventory is very important for enterprises. It is also called lubricants for the enterprise operation. Holding inventory have effect of economies of scale; cushion the impact of uncertain factors, and balance demand and supply. But holding too much inventory will occupy enterprise floating capital and increase business costs, also cover quality problems. So a reasonable level of inventory is necessary for balancing inventory and service level in supply chain management.TQ is a mobile phone production corporation. Its business grows rapidly, has fast production pace, and many kinds of raw materials. But factory facilities can not be synchronized with the increase in business. Therefore TQ has taken various measures to reduce the inventory of raw materials, to save storage space and improve the quality of production. However, low inventories will also bring risks. Any unforeseen circumstances will cause materials shortage, and increase fees and costs. So how to maintain an appropriate inventory level, which can not only guarantee a minimum of stocks, but also ensure production completed as planned and orders delivery on time, is a major problem of the company.To meet the different requirements of raw material inventory in TQ, we need to setup reasonable safety stock of raw materials to keep the lowest inventory turn over rate after meeting customer demand. In this paper, I have collected 54 weeks statistics of customer demand by four supply methods which include common and unique raw materials to find out which distribution of mathematics the data meet. Then I use the characteristics of the distribution to calculate an appropriate safety stock level. At last I compare the calculated data and the former inventory levels to verify whether the safety inventory is reasonable and whether it can improve the existing inventory levels.Because the actual market demand and production are rapidly changing, this way of calculating safety stock can only be a reference value. But it can play a guiding role in the actual operation of the company. We can revise the data in accordance with the actual situation.