INVENTORY MANAGEMENT IN PAPER INDUSTRY

Abstract

Paper industry is a material intensive industry. It uses large volume of different type of items. Some raw materials have got strong seasonal effect while some other have got undeterministic requirements. The inventory should ensure the availability of material on requirement with minimum cost to the industry. Absolute safety will cause a lot of working capital tied up in inventory while less stocking of material may lead to stockouts. Thus a compromise has to be made between these two conflicting requirements. A risk factor can be involved for this requirement. Taking these things into account the model is prepared for paper industry, The EOQ, Safety stock and Re-order level for variety of items have been calculated. For a group of spare parts, saving in money for safety stock, by using the above model is also calculated