Research On The Raw Materials Inventory Control For H Company

H company is a small and medium-sized LED packaging company,and its industry is very competitive and less profitable.So in order to obtain competitive advantage,H company should take the low cost strategy which include inventory cost strategy.The inventory management pattern H company currently take is extensive,it results in overstocked materials,slow inventory turnover and occupation of funds.So taking scientific inventory management strategy to reduce operating costs and increase operation efficiency is extremely urgent.The paper analyzed some problems of inventory management in H company,mainly including demand forecasting,material classification,inventory control model selection and supplier relationship management.In order to solve these problems,the paper classified the materials by scientific classification method,used the reasonable supplier management strategies,selected the appropriate inventory control model.The three-dimensional Kraljic materials classification based on Analytic Hierarchy Process(AHP)model Process(AHP)model which included business impact factor,supply risk factor and material value factor was adopted to classifying materials in this paper.Through interviewing the relevant experts of H company,the paper determined the evaluation value and weight of all indexes.And the raw materials of H company were finally divided into six classes which included traditional-bottleneck materials,business-risky materials,business-safety materials,valuable-risky materials,traditional-lever materials and normal materials.And then,the paper offered different supplier management strategies according to different raw materials.Based on the different supplier management strategies,the inventory control models of different raw materials were determined.The traditional-bottleneck materials should take multiplespecies dynamic ordering model,the business-risky materials should take multiple-ordering based random inventory control model,the business-safety materials should take deterministic inventory model,the valuable-risky materials should take safety inventory based random inventory control model,the traditional-lever materials should take genetic algorithm based quantity discount ordering model,the normal materials should take indeterminate regular ordering model.With the real situation of H company,the paper determined the relevant parameter and calculated the models,analyzed the improvement effect of these models.And finally,the conclusion was put forward that all the models would be benefit for reducing inventory cost.At last,in order to realize more scientific inventory management,the inventory control strategies and the ERP system of H company were combined together,the suggestion of embedding materials classification models and inventory control models into ERP system was put forward.