Inventory Management: The Policies and Strategies of Supply Chains

Abstract

At present, Thailand is focusing on the logistics development of both small and medium-sized enterprises, which play an important role in the country’s development. However, there are obstacles to improvement and negative correlations among significant factors. In addition, there is a continually increasing tendency in three main costs, which are; transport cost, inventory cost, and management cost. This article emphasized inventory management concerning the policies and strategies of supply chains. Multiple criteria inventory classification (MCIC) was used along with many actual inventory activities such as value, quantity, movement frequency, and the change in demand products to analyze problems and find solutions from each aspect. There are five groups of products were divided by the policies of inventory management and explained as follows. First, the products in group A were focused on the economic order quantity (EOQ), re-order point (ROP), forecasting, and are controlled by mixed strategies of push strategy and pull strategy. Second, the products in group B were focused on forecast accuracy, communication, and information sharing, along with being controlled by push strategy and economics of scale. Third, the products in group C were based on vendor managed inventory (VMI) and pull strategy. Forth, the products in group D used tracking signal (TS) to reduce the impact of cost. Lastly, products in group S were focused on the value of products presented to customers. It was controlled by a response strategy and an efficient strategy to create competitiveness. Moreover, entrepreneurs, business owners, and scholars can use the knowledge and put it into performing effectively.