This document presents a case study on developing a computerized inventory control system using Microsoft Excel. The objectives are to keep optimum inventory levels to meet customer demand while minimizing costs. Various forecasting methods and error analysis techniques are discussed and applied to inventory data. The system uses ABC analysis, economic order quantity calculations, safety stock determination and a bill of materials to optimize total costs. It provides a data flow diagram and demonstration of the Excel-based inventory management system.

1. Developing A Computerized System For
Inventory Control
Using Excel: A Case Study
SUPERVISED BY
MD. SAIFUL ISLAM
Assistant Professor
Department of Industrial
Engineering and Management
SUBMITTED BY
MD. AKIBUL ISLAM
Roll: 1411018
MD. MANOARUL AMIN HAWLIDER
Roll: 1411031
Khulna University of Engineering & Technology

2. MOTIVATION
Microsoft excel is becoming user friendly and it
is possible to develop different system by using
it.
So, it can be implemented on inventory
management to get dynamic result.

3. OBJECTIVES
• To keep optimum inventory to
meet customer demand.
• To minimize the inventory cost.

4. Forecast Methods
1
2
3
4
5
Naïve Method
Moving Average
Weighted Moving
Average
Exponential
Smoothing (α=0.2)
Exponential
Smoothing (α=0.3)
3

5. Error =Forecast - Demand
𝑀𝑆𝐸 =
(𝐸𝑟𝑟𝑜𝑟)2
𝑛 − 1
𝑠 = 𝑀𝑆𝐸
UCL =+zs
MSE= Mean Square Error
LCL =-zs
UCL
LCL
errors
FORECAST ACCURACY CHECK

6. Point beyond a control limit
UCL
LCL

7. Non Random Errors
UCL
LCL
Fig: TrendFig: CyclingFig: Bias

8. A-B-C Approach
All products
A
(Value = 70-80%)
B
(Value = 10-20%)
C
(Value = 5-10%)

9. EOQ
𝑄 =
2𝐷𝑆
𝐻
𝑇𝐶 =
𝑄
2
𝐻 +
𝐷
𝑄
𝑆
S= Ordering Cost H = Holding Cost
OPTIMIZE

10. Risk of a stockout
Service level
By using service level, we will get the value of z
σ = Standard deviation of lead time demand
Safety Stock = z×σ
Safety Stock

11. Inventory of the Company
Raw Materials
Finished Goods
BOM

12. Group Reedisha, Bhaluka,
Mymensingh
The Inventory of
Fabrics

13. Group Reedisha, Bhaluka,
Mymensingh
The Inventory of
Button, Rivet &
Tags

14. Safety
Stock
EOQBOM
ABC
Approach
Forecast
Analysis
The Forecast of goods
The Forecast of goods
The required quantity
of raw materials
The required quantity
of raw materials
Data Flow In the System

15. Presentation on the Inventory Control
system that we have developed

23. 5,50,994.19
9,22,676
TC by EOQ TC by Company
TC by EOQ
TC by Company
TOTAL COST FOR 21th PERIOD (ORDERING & HOLDING COST IN TK)

24. 1. Demand should be constant over time.
2. The best forecasting method needs to be
selected manually.
3. A minimum of 15 periods demand are needed
to run the program.
4. Quantity discount is not allowed.
5. Order quantity should be constant over
specific time period.
Limitations

25. An inventory management system becomes
costly for the computer functioning
calculation. The Microsoft excel is very
common one that is used in the normal days.
As the program is completely done in excel,
this can be used in every official or non-
official production farms in the world. With a
simple knowledge in excel, anyone can
operate the system on their own hands.
Conclusion