An ABC Analysis Model for the Multiple Products Inventory Control –

A Case Study of Company X

Kuo-En Fu

Assist. Prof., Institute of Industrial Management,

Taiwan ShouFu University, Taiwan

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Wei-Zhen Chen

Graduate Student, Institute of Industrial Management,

Taiwan ShouFu University, Taiwan

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Lon-Chen Hung†

Assist. Prof., Dept. of Computer Science and Multimedia Design,

Taiwan ShouFu University, Taiwan

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ShihSen Peng

Prof. Institute of Industrial Management,

Taiwan ShouFu University, Taiwan

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(IM02)

Abstract.

Company X is a small manufacturer in Thailand that produces hundreds of small joint hinges or lockers for the home furniture around the world.

The company usually orders mass different raw material irregularly and causes different raw material inventory shortage for the multiple products manufacturing process.

The shortage of raw material for production always makes the process discontinuous and reduces the productivity.

To solve this problem, this paper intends to study a raw material inventory control model for the most important multiple products production in the company X.

The ABC analysis technique for the inventory control system is first used to identify the most important multiple products and then the economic order quantity (EOQ) of each product is developed to find their inventory model equation individually.

Using the regression technique, the raw material inventory control model for the important multiple products is constructed.

The result of regression model analysis shows a goodness of fitting to the selected important multiple products and would expected to avoid the raw material shortage problem and help to organize the complicate inventory control system for company X in the future.

Key Words:

Productivity, ABC analysis, economic order quantity, multiple products, inventory control model