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Inventory has been a major concern in supply chain and numerous researches have been done lately on inventory control which brought forth a number of methods that efficiently manage inventory and related overheads by reducing cost of replenishment. This research is aimed towards providing a better replenishment policy in case of multi-product, single supplier situations for chemical raw materials of textile industries in Bangladesh. It is assumed that industries currently pursue individual replenishment system. The purpose is to find out the optimum ideal cycle time and individual replenishment cycle time of each product for replenishment that will cause lowest annual holding and ordering cost, and also find the optimum ordering quantity. In this paper indirect grouping strategy has been used. It is suggested that indirect grouping Strategy outperforms direct grouping strategy when major cost is high. An algorithm by Kaspi and Rosenblatt (1991) called RAND is exercised for its simplicity and ease of application. RAND provides an ideal cycle time (T) for replenishment and integer multiplier (ki) for individual items. Thus the replenishment cycle time for each product is found as T×ki. Firstly, based on data, a comparison between currently prevailing (individual) process and RAND is provided that uses the actual demands which presents 49% improvement in total cost of replenishment. Secondly, discrepancies in demand is corrected by using Holt’s method. However, demands can only be forecasted one or two months into the future because of the demand pattern of the industry under consideration. Evidently, application of RAND with corrected demand display even greater improvement. The results of this study demonstrates that cost of replenishment can be significantly reduced by applying RAND algorithm and exponential smoothing models. |
