Abstract:
The objective of this Master Project is to reduce the total cost of raw materials
inventory in the case study bakery factory. The first step involves classifying raw
materials in the inventory using ABC analysis. The selected raw materials including (1)
Pork floss 90 (2) Pork floss 60 (3) Margarine CL100 (4) Margarine CLBUN (5) Butter CP22
are a type of raw material with a high inventory value and should be strictly controlled.
According to the study of historical data, it was found that the raw material reservation
quantity of the selected items was adjusted according to the experience of the order
man. This reason, the quantity of purchasing order and demand were unbalanced,
resulting in the amount of raw materials remaining in stock per year equal to
159,467.00 kilograms, equivalent to the value of raw materials in stock equal to
14,726,123.07 baht per year. Therefore, apply the Economic Order Quantity (EOQ), and
Reorder Point principles to determine the optimal quantity of raw materials to
purchase each time, and the timing for placing new orders. This aims to minimize costs
associated with ordering raw materials and maintaining inventory, ensuring the lowest
possible cost. After improving the ordering method for raw materials, the inventory
was 118,818.00 kilograms per year, which was reduced by 25.49%, and the value of
raw materials inventory was equal to 10,899,901.09 baht per year, which decreased by
3,826,221.98 baht per year, equivalent to 25.98%6. Then a sensitivity analysis of the
results was performed, the raw material price factor and the raw material demand
factor were sensitive to total inventory management costs (TC). In terms of Economic
Order Quantity (EOQ), the sensitivity factors are labor costs and raw material demand.