Improving inventory management policies and establishing raw material stock levels

Abstract

An extensive component of Wispeco Aluminium’s expenses consists of buying raw materials and consumables used in the production process. Currently, the company does not have a scientifically-based system for inventory management of consumables and raw material stock levels. After completion of this project, a flexible system will be in place which will assist Wispeco to correctly manage their inventory levels. This system will be derived by making use of a thorough literature study, studying best practices found in the industry and other operations management techniques. The system will determine the economic order quantity, reorder points and safety stock levels for all the products, which will in turn minimize the total costs associated with inventory management.