Design parameters of inventory models to improve customer delivery performance of a manufacturing/supply chain system

• Main Author: Soh, Cindy Xing Ru
• Other Authors: Sivakumar A. I.
• Format: Final Year Project
• Language: English
• Published: 2018
• Subjects: DRNTU::Engineering
• Online Access: http://hdl.handle.net/10356/74807
• Institution: Nanyang Technological University

In recent years, many companies are outsourcing their logistics services to third party logistics provider for international logistics operations. These companies utilize a 3PL’s established network and pool of experienced talents to maximize the opportunities, reduce cost and assets, and tap onto the surging business and consumer of developing market overseas. CEVA Logistics is one of such 3PL that provides logistics solution to companies across 17 regional clusters. It is observed from the inbound and outbound data provided from CEVA Logistics that the goods in the warehouse are not adopting any inventory control model. Thus, the purpose of this project is to study the delivery pattern of a single inventory delivered by CEVA Logistics. And design parameters of inventory model to improve customers satisfaction while incurring least cost. Through this project, with the inbound information given by CEVA Logistics and formulas from the inventory models, reordering level and base stock level is calculated. To compare within each inventory models, variables such as lead time, fixed order quantity and review periods are varied and analyzed. Effectiveness of these inventory model is represented with service level to average inventory graph. Through these calculations, we have reevaluated the quantity of goods to carry and deliver to achieve a certain service level. Later, we studied the elements contributing to the carrying and transportation cost for the level of quantity obtained from inventory model. This ensures that the overall improvement of service level do not come with an expense of cost. At the end of this project, we have chosen an inventory model and an air fright provider to calculate the overall cost of inventory (holding and carrying) in the operating region and its corresponding service level. Thus, we can provide and justify different actions that could be taken to improve the customers satisfaction with cost consideration.