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Inventory Management for Sweetener : A Case Study of Powder
Khobkul Khonton , Porntep Khokhajaikiat *
Department of Industrial Engineering, Faculty of Engineering, Khon Kaen University
*Correspondent author: email@example.com
The objective of this research is to formulate the inventory model of Sweetener, which was the main
raw material and a higher average value per month in the company. The amount of raw material order depends
on consider the forecast customer demand and the minimum order quantity of raw material. The overestimation
of raw material consumption leads to increase inventory, ordering costs and holding costs. From the study of raw
material consumption in the past, it was found that the raw material consumption was normal distribution. Consumptions of the raw material was fi rst forecasted by a Time Series Forecasting model and Box-Jenkins method.
Then, a forecasting model that minimized the mean absolute deviation was selected. Finally, the selected inventory models were utilized to fi nd the most economic order quantity, ordering period, and the appropriate ordering
frequency of the raw material. The results indicated that average inventory and average total cost (ordering cost
and holding cost ) was reduced to 60.58 percent and 20.14 percent respectively.
Keywords: powder beverage, inventory model, mean absolute deviation