Inventory management and control – part 1

The virtual company “ECO-Mebel” SA is a furniture manufacturer in two product groups: case furniture sets and upholstered furniture. The company is currently in a growth phase and is recording continuously increasing sales. Furthermore, it owns a warehouse for raw materials needed for furniture production. Suppliers are companies from all over Poland. To efficiently manage and control the warehouse, it is necessary to determine the consumption of these raw materials per unit of time, determine the delivery lead time, reorder point, optimal order quantity, and ordering policy. Until now, the ordering process has been purely intuitive, based on experience. Only last year were experts from the analysis, procurement, and production departments asked to conduct research on improving the delivery process and managing the entire warehouse. Due to high storage costs and frozen capital, a sample analysis regarding raw material management in the warehouse was conducted.