Research On Sheet Inventory Control Of Bayer In China Under Uncertain Demand

In July2014, due to the strategic adjustment, the Bayer Sheet (Beijing) co., LTD. and theBayer Sheet (Guangzhou) co., LTD. has carried on the reorganization merger, the production lineof Bayer sheet (Beijing) co., LTD. has all transferred to Guangzhou after the merged, now BMSCwill be responsible for all business in China, and Bayer Sheet (Guangzhou) co., LTD. will beresponsible for all sheet production. The system and management are not enough mature after themerged, there are some problems in the inventory management, for example, extensive inventorymanagement, high inventory levels, inventory structure unreasonable, the response of customerdemand cycle is too long, low service satisfaction and so on. From actual conditions, this paperaimed at the problems in inventory management, in order to explore the suitable inventorymanagement methods and concepts for Bayer Sheet (Guangzhou) co., LTD., by using the methodof mathematical statistics combined with inventory management aspects of the professionalknowledge.Effective inventory control should not only ensure the production and meet the demand, butneed more considering the time value of raw materials and products, with the least pay to manageinventory, control the inventory at the best level, so as to get the most benefits. It is now manyexcellent enterprises and entrepreneurs’ goal, also is the key for enterprise get to the top in thefierce market competition. Excess inventory will hinder the reasonable allocation of enterpriseresources and increase the unnecessary inventory holding cost. Inventory shortage will loss ofsales opportunities and damage customer service experience. The uncertainty of market demandrequires producers to dynamically adjust inventory levels, using reasonable effective inventorystrategy to cope with the dynamic change of market demand, can reduce the inventory cost,maximize benefits and maintain good customer service levels.Good inventory control strategy based on the effective market demand forecast. Through the study found that the sheet demand has obvious seasonal characteristics, it is impossible tomanagement the sheet inventory just by experience. We built the sheet forecasting modelconsidering seasonal demand to forecast the demand in chapter4, but demand forecastingdecisions can only help managers to manage the inventory, and does not determine the optimalinventory level. We plans to build two stage demand newsboy model to determine the sheetoptimal inventory levels. In the first stage, We determine normal production batch mainly basedon sheet demand forecasting model, when the market demand is less than normal production batch,the factory stop to product, the rest of the sheet will produce inventory holding cost, when themarket demand is more than normal production batch, the factory will arrange productimmediately. There is only one chance to emergency production in the second stage, there willproduce punishment cost of shortage if the second production batch still cannot meet the demandof market, the rest of the sheet will produce inventory holding cost if the second production batchis more than the market demand. Practice shows that demand is divided into two stages in thenewsboy model can effectively improve the level of enterprise inventory management andincrease revenues.