An Engineering Management Approach to Electrical and Electronic Fulfillment Inventory Investment Improvement Planning at Low Cost Open Access
Downloadable ContentDownload PDF
The intention of a products distribution business enterprise is to invest in products or inventory, create value through service (or product availability), and in return capture revenue. This activity is naturally accompanied by varying levels of investment risk due to product demand uncertainty. A common concern or challenge given this organizational activity is how to best ensure inventories are available for customers within a reasonable service time window, and yet not tie up too much working capital in that service inventory. One possible method is proposed and its execution elaborated upon herein.The purpose of this study is to systemically engineer and apply an improved inventory purchasing decision model with a low implementation cost, specific to medium-sized electrical and electronic components distributors, thereby creating a bridging inventory investment improvement method for use until the cost of a more sophisticated solution becomes viable via scaling organizational growth.To reach this improvement, autoregressive integrated moving average time series forecasting will be applied to static historical service data for three electrical and electronic components distributor supply chains and fulfillment networks. Given a new forecasting technique that proves to be accurate for a high percentage of materials, evidence of improvement by hypothetical differentiation of required on-hand inventory levels will be presented.