Optimizing Inventory Management Cost: Case of Simap

Abstract

Inventory management is an important phase of total quality control. The surgical instruments manufacturing industry is one of the export-oriented sectors in Pakistan; there is a need to improve its business operations. This study focuses on comparison of eight techniques for the inventory management; data for 12 months was curated in 2017, from 75 firms operating in Sialkot. Statistical analysis was conducted to compare the following eight inventory management techniques: Lot for Lot, Wagner-Whitin, Least Unit Cost, Least Total Cost, Silver-Meal, Economic Order Quantity, Periodic Order Quantity, and Part Period Balancing. The Lot for Lot, Least Unit Cost, Least Total Cost, Sliver-Meal, and Wagner-Whiten, were found better than Economic Order Quantity, Periodic Order Quantity, and Part Period Balancing; Periodic Order Quantity is better than Economic Order Quantity which in turn is better than Part Period Balancing. One must keep in mind that statistical out-performance of one technique against the other should not consume the decision-makers, rather the decision should also include the practicality of the business operation.