Abstract:
The objective of this master project is to propose a new purchase planning method for ten
types of sub-raw materials of hot-rolled coil steel industry companies by using Monte Carlo
Simulation Technique. These sub-raw materials are one of the most important components for
hot-rolled coil steel industry. Based on the current information, these materials are purchased as
three-month period in advance. This leads inventory management cost of 172 million Baht in the
third quarter of 2010 to the company. A reason for this is that there is high uncertainty of
customer demand and purchasing lead-time. Based on the mentioned problem, the authors then
propose a Monte-Carlo simulation technique in order to remedy this problem. A real data during
July to September 2010 is used to simulate in order to determine new order sizes for demands and
their reorder points. The result shows that the inventory management cost can be greatly reduced
up to 11,697,357.00 million Bath per quarter