Indicative FSP

Inventory optimization in the procurement department

The optimal deployment of inventory is a vital function for all corporations. Nevertheless, the inventory management as a necessary policy is not given priority in large number of Companies, especially more service oriented ones. Moreover, some Companies do not even exploit widely known and used inventory management techniques during their procurement related decision making. One of the mentioned techniques is the implementation of reorder-point-reorder-quantity referred to as (R, Q) policies, which are widely used in industry and extensively studied in the inventory literature. This project examined the present state of inventory management in Armenia Telephone Company (“ArmenTel”) based on the historical data of turnover of twenty three inventory items. By means of simulations of different scenarios for reorder-point and reorder-quantity policies, recommendations for optimised inventory management policies were made.

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