Track: Supply Chain Management

Abstract

Fast-moving industries like consumer goods constantly need to keep an effective and responsive inventory management system in place to get the correct products to customers at right time. Optimizing inventories while taking the shelf life of consumer items into account is a difficult task for most industries. Increasing the effectiveness of inventory optimization is the primary factor in determining the profitability of any FMCG industry. Consumer goods industries are following various tools for inventory management such as economic order quantity, minimum order quantity, just in time, ABC-XYZ analysis & stock keeping norms etc. Among them economic order quantity (EOQ) is widely followed by most of the fastest growing consumer goods companies. However, it poses a challenge in situations where there are shelf life limitations. Considering the situation, supply planners need to take judgmental call-off for ordering materials. This study will examine how to make judgments on ordering martials using a quantitative method while taking into account batch size, EOQ, and shelf life. From the viewpoint of the FMCG industry, the study's main goal is to optimize inventory while ordering materials using a quantitative tool in various scenarios. In order to choose the optimal choice for working capital optimization, the study will evaluate various ordering decisions, costs associated with various ordering environments, and risk associated with each. It is evident from the study that the FMCG sector should use this quantitative method to promote effective inventory management.