Improvement Strategies For Inventory Management Of Northwest Lubricant Sales Company

In the age of the extreme fierce market competition, it is an important topic that the ways to improve the efficiency of management and reduce the cost of operation. Moreover, improving and optimizing management of supply chain is one of the efficient ways to deduct cost of operation and improve service level and customer satisfaction. In addition, stock plays an important role in each stage of supply chain and the level of stock management is a key indicator of corporation cost management in supply chain management. Thus, the goal of management is that balancing the best combination of cost and profit under the modest level of stock, while improving and optimizing the level of stock management.The object of study in this article is a lubricating oil reseller company named Northwest lubricant sales company, whose current conditions are overstock, unreasonable stock structure, low inventory turnover, cash flow stress and high operating cost. In this article, according to research, seeking and analyzing problems and flaws of stock management, and then giving suggestions of improving the accuracy of demand forecasting by using methods such as supply chain method, ABC classification method, Economic Order Quantity(EOQ model) and demand forecasting method. Consequently, the strategies of stock management can be summarized such as moving average method, exponential smoothing method. The company can benefits from using integrated method. For example, a well-established ABC classification can makes product classification is more close to company’s situation, designing a reasonable stock level and margin of stock by using Economic Order Quantity model, and enhancing stock management level through using valid measures like ERP system, performance evaluation. The significance of this case study is that it shows that many useful methods to improving stock management level, which is a referential example for similar industrial firms.