Inventory Planning with Forecasting Expenditure

221 Pages·2022·9.234 MB·English

by  Sanjay Sharma

INVENTORY PLANNING WITH

FORECASTING EXPENDITURE

Sanjay Sharma
Inventory Planning
with Forecasting
Expenditure

Inventory Planning
with Forecasting
Expenditure
Sanjay Sharma
First edition published 2022
by CRC Press
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and by CRC Press
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© 2022 Sanjay Sharma
First edition published by CRC Press 2022
CRC Press is an imprint of Taylor & Francis Group, LLC
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ISBN: 978-1-032-20929-6 (hbk)
ISBN: 978-1-032-21202-9 (pbk)
ISBN: 978-1-003-26725-6 (ebk)
DOI: 10.1201/9781003267256
Typeset in Times
by MPS Limited, Dehradun
Contents
Preface......................................................................................................................vii
Author.......................................................................................................................ix
Chapter 1 Introduction..........................................................................................1
1.1 Planned Schedule......................................................................1
1.2 Problem Description.................................................................4
1.3 Forecasting Expenditure...........................................................4
1.3.1 For Buying...................................................................5
1.3.2 For Making................................................................11
1.4 Potential Benefit......................................................................22
Chapter 2 Procurement.......................................................................................25
2.1 Cost Estimate..........................................................................25
2.2 Modified Cost Estimate..........................................................25
2.3 Related Index..........................................................................27
2.4 Analysis...................................................................................30
2.4.1 Reduction in the Forecasting Expenditure...............30
2.4.2 Increase in the Forecasting Expenditure..................31
2.5 Threshold Value......................................................................36
2.5.1 Ordering Cost Variation............................................36
2.5.2 Carrying Cost Variation............................................38
Chapter 3 Production..........................................................................................55
3.1 Total Cost Formulation..........................................................55
3.2 Modified Total Cost................................................................55
3.3 Relevant Index........................................................................56
3.4 Effects.....................................................................................59
3.4.1 Decrease in the Forecasting Expenditure.................59
3.4.2 Raise in the Forecasting Expenditure.......................60
3.5 Influence on R Value..............................................................65
3.5.1 Facility Setup Cost....................................................65
3.5.2 Holding Cost..............................................................66
Chapter 4 Applications.......................................................................................85
4.1 Buying.....................................................................................85
4.2 Making....................................................................................87
4.3 Associated Index.....................................................................90
4.3.1 Buying........................................................................90
4.3.2 Making.......................................................................96
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4.4 Influence................................................................................101
4.4.1 Purchase...................................................................102
4.4.2 Production................................................................106
Chapter 5 Highlights........................................................................................113
5.1 Cost of Forecasting...............................................................115
5.2 Evolution Stage.....................................................................116
5.3 Business Use.........................................................................126
Appendix...............................................................................................................129
General Reading..................................................................................................183
Index......................................................................................................................209
Preface
In an industrial or business case, purchase or procurement is a significant function.
Usually a procurement plan is prepared on the basis of a certain prediction of
consumption pattern or demand. However when this plan is implemented, then the
desired benefit is obtained corresponding to the forecast accuracy. In the available
literature, the forecasting accuracy is discussed a lot. A need is established to link
the forecasting accuracy with a forecasting expenditure. After an explicit inclusion
of the forecasting expenditure, the inventory planning for procurement/production
is described in the present book.
This book is expected to be useful for UG/PG students in engineering and
management and also has good potential for elective/supplementary core courses.
Sanjay Sharma
Mumbai, India
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Author
Sanjay Sharma is a professor at the National Institute of Industrial Engineering
(NITIE), Mumbai, India. He is an operations and supply chain management
educator and researcher with more than three decades of experience, including
industrial, managerial, teaching and training, consultancy, and research. Professor
Sharma has many awards and honors to his credit. He has published eight books and
papers in various journals such as European Journal of Operational Research,
International Journal of Production Economics, Computers & Operations
Research, International Journal of Advanced Manufacturing Technology, Journal
of the Operational Research Society, and Computers and Industrial Engineering.
He is also on the editorial board of several journals, including the International
Journal of Logistics Management.
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