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Inventory Managment

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- 1. INVENTORY MANAGEMENT : A CASE STUDY OF PERSONAL COMPUTER PRODUCT AT NATIONKIDZ COMPANY BY AINUN MARDHIYYAH BINTI MUSA AMALINA ATHIRAH BINTI MOHD SAUPI
- 2. CASE STUDY β’ Nationkidz Company operates its company 365 days per year. They sell PC such as laptop, desktop, monitor, and other computer appliances. One of the products they sell is Emax brand PC. β’ They sell 17 type of items β’ The holding cost of the year is 15% of the price and the ordering cost is RM 630. β’ By doing ABC analysis, we will know how stock of each category can be control. The economic order quantity also can be determining the optimum quantity of this product. Hence, order interval also can be obtained.
- 3. PROBLEM STATEMENTS β’ Company has poor inventory control - unable to categorized their product with category A, B or C. β’ Cannot predict the order quantity that need to order. β’ Wants to know lenght cycle time to order.
- 4. OBJECTIVES To categorize the Emax PC into A, B, and C by using ABC Analysis To determine the economic order quantity (EOQ) of Emax PC To find out order interval of Emax PC
- 5. METHODOLOGY . Procedure 1: Apply ABC analysis procedure Step 1: Represent the data in excel and find the Annual usage in (RM) = Unit Price Γ Demand Step 2: Sort the data by percentage annual usage in descending order. Step 3: Find the cumulative of annual usage for each item. The cumulative of annual usage for each item = π¨πππππ πΌππππ π»ππππ π¨πππππ πΌππππ (1)
- 6. Step 4: after complete step 3, find the cumulative Annual Usage Percentage = ππππππππππ πππππ πππππ ππππππππππ Γ πππ% (2) Step 5: Group the items into A, B or C categories ο§ Items A : the items that most important and need special care ο§ Item B : the items that intermediate in important and need standard care ο§ Item C : the item that least important and need little care
- 7. Procedure 2: Solving inventory model Step 1: Holding Cost Holding Cost = 15% Γ Price of the product Step 2: To find economic order quantity or Q* by mathematical is πΈβ = ππ«πͺπ πͺπ D = annual demand in units Q* or EOQ = economic order quantity Co = ordering cost per order Ch= holding cost per unit per year Step 3: Calculate number of order interval π» = πΈβ π«
- 8. ANALYSIS AND DISCUSSION
- 9. Item Brand Classification Items Price Pc Set Quantity Demand 1.7 ghz, ram 512, hdd 40gb, cd-rom Emax Hitam A1 390 5 1.7 ghz, ram 512, hdd 40gb, cd-rw Emax Merah A2 390 6 1.7 ghz, ram 512, hdd 40gb, agp 64 mb, cd-rom Emax Merah A3 390 8 1.8 ghz, ram 512, hdd 40gb, cd-rom Emax Hitam A4 400 1 2.0 ghz, ram 512, hdd 40gb, cd-rom Emax Hitam A5 410 7 2.0 ghz, ram 512, hdd 40gb, cd-rw Emax Hitam A6 415 1 2.0 ghz, ram 512, hdd 40gb, dvd-rom Emax Merah A7 420 8 2.4 ghz, ram 1 gb, hdd 80gb, dvd-rw Emax Merah A8 480 4 2.4 ghz, ram 512mb, hdd 80gb, cd-rom Emax Merah A9 465 1 2.4 ghz, ram 512mb, hdd 40gb, cd-rom Emax Merah A10 450 3 2.4 ghz, ram 512mb, hdd 40gb, cd-rom Emax Hitam A11 450 1 2.4 ghz, ram 512mb, hdd 40gb, dvd-rom Emax Hitam A12 460 1 2.6 ghz, 1 gb, hdd 40gb, dvd-rw Emax Hitam A13 500 3 2.6 ghz, 1 gb, hdd 40gb, cd-rom Emax Hitam A14 470 1 2.8 ghz, ram 512mb, hdd 40gb, cd-rw Emax Merah A15 500 2 2.8 ghz, ram 512mb, hdd 80gb, cd-rw Emax Merah A16 500 1 3.0 ghz, ram 512mb, hdd 80gb, cd-rom Emax Merah A17 600 1
- 10. Items Descending Order of annual usage Cummulative Cummulative Percentage % Category A7 3360 3360 15 A A3 3120 6480 28 A A5 2870 9350 40 A A2 2340 11690 50 A A1 1950 13640 59 A A8 1920 15560 67 A A13 1500 17060 74 B A10 1350 18410 79 B A15 1000 19410 84 B A17 600 20010 86 B A16 500 20510 89 B A14 470 20980 91 C A9 465 21445 93 C A12 460 21905 95 C A11 450 22355 96 C A6 415 22770 98 C A4 400 23170 100 C Total 23170 Table 3.3: Cummulative Percentage for Each Items
- 11. P = RM420 D = 8 units per year Ch = 15% of items = 0.15 X RM420 = RM 63 N = 365 days per year Co = RM 630 Product from category A, (Item 7) have highest demand and price : 2.0 ghz , Ram 512, HDD 40gb, DVD-Rom
- 12. πβ = 2(8)(630) 63 πβ = 12.65 By approximate πββ 13 π’πππ‘π To find economic ordering quantity : To find order interval : D = 8 and πΈβ = 13 units. πππππ πΌππ‘πππ£ππ, π = πβ π· π = 13 8 π = 2 π¦ππππ
- 13. Conclusion β’ Nationkidz Company should pay more attention product in Category A β’ By using inventory control system, the company can know the quantity order that should order are 13 units β’ The company should placing order and the next order is 2 years

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