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Inventory Optimisation by Means of Multivariate Analysis

Putkivaara, L. V. (2020) Inventory Optimisation by Means of Multivariate Analysis.

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Abstract:The commercial importance of managing inventories is reflected well by an abundance of scientific publications. Most of the models in literature address one or multiple factors that influence inventory levels, e.g. order quantity, lead times and Business Interruption risk, often in a deterministic way. Choosing the right factors can hugely influence the resulting inventory levels suggested by the model, and the capital bound in stocks. In Supply Management, Performance Pricing is a well-established instrument to quantify and address pricing potential by comparing the actual and the statistically calculated price for purchasing items. The calculation of the latter considers a multitude of hard and soft factors by means of multiple regression analysis. This thesis develops and applies a regression-based assessment method for inventory management, methodically founded on the step model described in VDI 2817. The application is not limited to a single company but facilitates cross-company benchmarking of inventory levels. The result is a statistically valid inventory optimisation model that uses data from two case companies. The empirical analysis shows that the case companies have inventory reduction potentials in certain material groups. By implementing the findings, the case companies can reduce capital tied to the inventories and improve financial aspects.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:https://purl.utwente.nl/essays/81293
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