Finished goods inventory management by production planning

• Main Author: Xu, Jie
• Other Authors: Rajesh Piplani
• Format: Theses and Dissertations
• Language: English
• Published: 2014
• Subjects: DRNTU::Engineering::Manufacturing
• Online Access: http://hdl.handle.net/10356/60671
• Institution: Nanyang Technological University

Due to the expansion of Company A Singapore’s production volume, it holds large finished goods inventory which is exceeding its in‐house warehouse capacity. The finished goods inventory requires expensive external storage and incurs additional costs. Poor planning practices were identified as the major causes of the large finished goods inventory; and an improved production planning strategy was proposed to reduce the finished goods inventory. A cost analysis model was constructed to optimize the cost effectiveness of the new planning strategy. After evaluating the finished goods inventory level and the relevant costs, the new production planning strategy incorporating shipping schedule was found capable of lowering inventory; and 3‐Day planning cycle was proven to be more cost effective and aligned with Company A Singapore’s future corporate strategy. As a result, implementing this planning strategy is recommended.