Analysis Of Improvement Strategy Of Overseas Part Inventory Management In S Company

S Company is a Sino-foreign joint venture automobile company. Depending on marketable products and excellent marketing and Production management, S company expands rapidly. It's annual sales and production volume has exceeded 1 million. By global sourcing, S company imports more than 4700 kinds of overseas components from over 450 suppliers in over 30 countries. Due to the long leadtime, variation of market demand and transportation time is a big challenge on inventory management. Without mathematical analysis on the influencing factors, S company still sets its inventory strategy mainly based on the experience of managers, leading to low efficiency. Without method to assess its affection on the inventory cost, it is impossible to quantify the value of leadtime. With the continuously increasing of volume, products and scale of global purchasing, it is important to build up an easy and scientific method of inventory strategy setting and evaluation of leadtime's cost, so as to consolidate the cost advantage and ensure the production and sales.From the perspective of ordering business, this thesis analyzes the improvement strategy of inventory management in S company. The analysis is carried out based on two questions of "optimization of safety stock decision" and "quantification of leadtime cost", providing solutions based on the actual business.For the question of "optimization of safety stock decision", author calculates the mean and standard deviation of actual leadtime by analysis on the orders' publishing time and goods receiving time. By analysis on the history of production rolling schedule, author calculates the mean and standard deviation of forecast accuracy under different leadtime. Based on the forecast accuracy, author works out mean and standard deviation of the requirement for each ordering windowtime. By inputting the aforesaid parameters of leadtime and demand into safety stock formula, author calculate the theoretic level of safety stock, providing a method of safety inventory decision.For the question of "quantification of leadtime cost ", author provides the calculation method of inventory holding cost, volume of fabrication and raw material authorization and surplus cost, which can be used as a reference during material sourcing.