Proposal of Improvement in Inventory Levels at TIER One Company

Abstract

In this case study, carried out in a supplier of the automotive industry, it was found an excess of costs due to inventory shortages, causing line stoppage in the company. That puts the company at high risk with penalties from the client, as it may not supply the requested sub-assemblies. To solve this problem, tools were used such as the Pareto diagram to select a client; the ABC classification to select a product; the analysis of the demand to identify the behavior pattern; Holt forecasts to predict demand with greater certainty; and a continuous review model with uncertain demand (q *, R) to set the appropriate inventory level, considering that the client handles a Just-In-Time strategy (JIT). The results indicate that with this improvement proposal can be guaranteed a customer service level of 99.9% and at the same time reduce the inventory logistics costs without receiving penalties