Track: Inventory Management

Abstract

The present paper is a case study based on a retail painting company (SME: small and medium-sized enterprise) located in Mexico that built a Central Warehouse to save money by improving its inventory management. The Fermat-Weber facility location problem was studied and applied to obtain the optimal location for the mentioned warehouse. The proposal was validated throughout the ROI methodology to ensure necessary financial results achieving a cost reduction and investment return within the first year of operation of the new warehouse. It is paramount important for current SMEs to apply exact methodologies to improve their cash flow and promote their existence among other companies in such a competitive business environment.  The authors' primary purpose is to use an existent model in a real case that can be replicated by any retail SME obtaining cost improvements.