A Research On Spare Parts Inventory Management Of C Company

The rapid development of Economy and Science Technology, especially the evolution ofInformation Technology and Communication Technology, had already made LogisticsIndustry become a guarantee of the accelerated commodity circulation. Moreover, the risingof Electronic Logistics resulted in the Logistics Industry arriving at its top of lifecycle. Withthe development of Logistics Industry, enterprises from different industries had increasinglyfocused on theirs interior management, such as material management and inventorymanagement. In recent years, improving the cost control of inventory management hasbecome the crucial measures to decrease operating cost, to avoid the sluggish of floating cost,to improve the capability of allocating resources, and to enhance the marketing competencepower.As a branch company of China Southern Power grid Corporation, C Company has beenengaging in managing, operating, maintaining, and building its supply station andtransmission line since it was built in2003. It is one of the backbone enterprises of west-eastelectricity transmission project. C Company has been providing a stable and constantelectricity supply for Guangdong Province, Guangxi Province, Yunnan Province, GuizhouProvince, and Hainan Province since it was built; however, there is a great deal of problemsexisting in the company’s inventory management, such as the inappropriate procurement plan,the unclear classification of spare parts, and the incomplete implement of spare partsmanagement system. For the above problems, this paper studies on the current situations ofinventory management in C Company and its realizable inventory optimization.This paper is organized as follow: Firstly, we analyze the current situation of theinventory management, which based on the collected data about the classification and valueof spare parts, and figure out the existing problems in the inventory management of CCompany. Secondly, for the unclear classification problems, the ABC inventory classificationis used to classify spare parts, which based on the factors that influenced on them, and someadvises on the inventory management are given in terms of different category. Thirdly, weintroduce the Economic Order Quantity (abbreviated as “EOQ” in the following part) as a model of C Company’s spare parts to figure out their optimum order point. The EOQ model’seffects on controlling inventory cost are examined by an example N. In the fourth section,some optimum proposals are proposed to solve company’s problems from inventorymanagement and improve the level of management. Finally, we analyze the optimization ofeffect on the base of some index to find out whether the proposals are really working.By researching and analyzing the inventory management of C Company, we classify itscurrent situation and identify its problems. Through a combination of quantitative andqualitative ways, we take appropriate optimum proposals to deal with the inventorymanagement problems, with the purpose of creating positive effects to the production anddevelopment of C Company.