Thesis (M.Eng.)--Chulalongkorn University, 2008

This thesis attempts to look at the inventory management practices of a relatively new company that has shown progress in its operations. The business of the case company is trading. The main job involves analyzing relevant historical documents over the 10 months from May 2007 to February 2008 to cover the fluctuation of demand. The company’s products are divided into 3 categories to facilitate analysis, and eventually to select only the most important category for detailed study. The imported products with known price increases turned out to have the most value and were of the most importance to the company. The Known Price Increase Model was then modified and applied to these products to serve as the basis for considering the stocks that had to be ordered for storage in order to optimize return on investment. The conventional Fixed Order Quantity Model was used for the products the prices of which do not change frequently. As the case company has 2 warehouses that are situated apart, and have limited storage capacity, it was studied the ratio of the products for storage at the 2 warehouses to increase efficiency and better management control. When an attempt to determine the quantities of all the products under study that have to be ordered and stocked in the inventory was carried out, it was discovered that the company did not have sufficient storage capacity for all of them, namely, the storage capacity needed was 8,421.88 cubic meters but the storage capacity available in warehouse A is only 1,750 cubic meters. This shortfall is not unusual, especially since this company is quite new and could reasonably be expected to be cautious in its operations. The study shows that the total savings from using the Fixed Order Quantity Model for all the unclassified products is 44,594.93 baht, or equal to 7.89 per cent of the Total Stocking Cost (TSC). The savings from applying the Known Price Increase Model to imported products and domestic products with known price increases products is 594,512.30 baht