GNT Group is a Nordic/Baltic wholesaler that distributes products in the IT, entertainment and home electronics sector. GNT is facing problems with inaccurate inventory levels which can lead to unnecessarily high inventory carrying costs or lost sales. Currently the decisions about when and how many to order are made somewhat arbitrarily by the responsible personnel. Their decisions are based only on some brief sales history and on experience. GNT wants to develop its ERP system to be able to support the purchaser in these and other related decisions. The purpose of this thesis is to give suggestions to what decisions the ERP system should support and how these decisions can be made. The three main tasks in this thesis are to suggest how to calculate the optimal order quantity, how to calculate the optimal ordering point and how to decide whether it can be profitable to store an article in only one of GNT’s warehouses. The suggested solution is based on a volume value/demand frequency classification which also takes an item’s life cycle characteristics into consideration. For the different classes suitable calculations and decisions are suggested concerning the three main tasks and issues related to them.

Sammanfattning Syfte - Syftet med denna studie är att bidra till ökad förståelse för hur lager kan styras när varierad efterfrågan förekommer. För att uppnå syftet är målet med studien att sammanställa processer som underlättar för lagerstyrning vid varierad efterfrågan. Detta möjliggörs genom att besvara följande frågeställningar: 1. Vilka metoder för säkerhetslagerberäkning och lagerstyrning är lämpliga när hänsyn bör tas till varierad efterfrågan? 2. Hur påverkas lagerförings- och ordersärkostnader av olika sätt att styra lager vid varierad efterfrågan? Metod - Teorier angående lagerstyrning vid varierad efterfrågan samlades in via litteraturstudier. En fallstudie genomfördes för att applicera det teoretiska ramverket på empiri från fallföretaget. Empiri samlades in via intervjuer och dokumentationsstudier och utgjorde en grund för beräkningar och vidare analys. Resultat - Lämplig säkerhetslagerberäkning vid varierad efterfrågan anses vara SERV2 som tar hänsyn till antalet bristtillfällen och ger ett bra mått på lagertillgängligheten över tid. De dynamiska lagerstyrningsmetoderna Silver & Meal samt Wagner-Whitin kan i större utsträckning hantera stora variationer i efterfrågan gentemot beställningspunktssystem. Beräkningar resulterade i att Wagner-Whitin var den lagerstyrningsmetod som i majoriteten av fallen genererar lägst totalkostnad när hänsyn tas till lagerförings- och ordersärkostnader. En process för lagerstyrning vid varierad efterfrågan har kartlagts där indata i form av metod- och resursobjekt redogörs. Detta för att bidra till ökad förståelse för hur lager kan styras vid varierad efterfrågan. Implikationer - Inom denna studie framgår det att kostnaderna för lagerstyrningen vid varierad efterfrågan kan sänkas med hjälp av dynamiska lagerstyrningsmetoder. Det är dock viktigt med trovärdig indata för att generera tillförlitliga resultat. Begränsningar - Inom de dynamiska lagerstyrningsmetoderna vägs ordersärkostnad mot lagerföringskostnad och genererar det mest ekonomiska alternativet ur lagerstyrningens perspektiv. Det måste inte vara det bästa ur ett helhetsperspektiv då förändrade orderkvantiteter kan påverka andra delar av materialflödet. De processkartor som är upprättade utgår från den valda lösningen, detta begränsar tillämpningen till verksamheter som har liknande förutsättningar som fallföretaget. Nyckelord - Varierad efterfrågan, lagerstyrning, säkerhetslagerberäkning, lagerstyrningsmetod. / Abstract Purpose - The purpose of this thesis is to develop an understanding of how to control inventory when the demand varies. To achieve the purpose, the goal is to create a process that facilitates inventory management at varied demand. This is feasible by answering following questions: 1. Which methods of safety stock calculation and inventory control are appropriate and take varied demand in consideration? 2. How is the inventory carrying cost and ordering cost affected by different methods of controlling inventory when demand varies? Method - Information about controlling inventory at varied demand was gathered through literature studies. A case study was carried out to apply the theoretical framework on empirical data from the business case. The empirical data was collected through interviews and documentation studies, which provided a basis for calculation and further analysis. Findings - SERV2 is considered as an appropriate method for safety stock calculations since it takes the number of occasions for shortages into account and provides a good measurement of the stock availability over time. The dynamic inventory control methods Silver & Meal and Wagner-Whitin can handle variations in demand better than order point systems. Calculations show that Wagner-Whitin generates the lowest total costs in the majority of cases. A process is established to facilitate inventory management at varied demand. Implications - Within this study it is shown that using dynamic inventory control methods can reduce inventory control costs when demand varies. Nonetheless it is important to have persuasive input to generate reliable results. Limitations - The dynamic inventory control methods balance order cost with inventory carrying costs to find the most economic option from an inventory control perspective. It is not always the best solution from a holistic perspective since changed order quantities can affect other parts of the material flow. The established process charts are based on chosen solution, which limits its application to businesses with similar conditions as the case study. Keywords - Varied demand, inventory control, safety stock calculation, inventory management

Optimizing supply chain is the most successful key for manufacturing systems to be competitive. Supply chain (SC) has gotten intensive research works at all levels: strategic, tactical, and operational levels. These levels, in some researches, have integrated with each other or integrated with other planning issues such as inventory. Optimizing inventory location and level of safety stock at all supply chain partners is essential in high competitive markets to manage uncertain demand and service level. Many works have been developed to optimize the location of safety stock along supply chain, which is important for fast response to fluctuation in demand. However, most of these studies focus on the design stage of a supply chain. Because demand at different horizon times may vary according to different reasons such as the entry of different competitors on market or seasonal demand, safety stock should be optimized accordingly. At the planning (tactical) level, safety stock can be controlled according to each planning horizon to satisfy customer demand at lower cost instead of being fixed by a decision taken at the strategic level. On the other hand, most studies that consider safety stock optimization are tied to a specific system structure such as serial, assembly, or distribution structure. This research focuses on formulating two different models. First, a multi- echelon safety stock optimization (MESSO) model for general supply chain topology is formulated. Then, it is converted into a robust form (RMESSO) which considers all possible fluctuation in demand and gives a solution that is valid under any circumstances. Second, the safety stock optimization model is integrated with tactical supply chain planning (SCP) for manufacturing systems. The integrated model is a multi-objective mixed integer non-linear programming (MINLP) model. This model aims to minimize the total cost and total time. A case study for each model is provided and the numerical results are analyzed.

[pt] Visando equacionar o abastecimento do mercado asfalto brasileiro e atendimento das metas financeiras da empresa, evitando custos excessivos com estoques, a presente dissertação propõe um modelo de gestão de estoque de asfaltos para a companhia analisada. O modelo desenvolvido busca melhorar a atual gestão que é feita com base na experiência dos colaboradores, trazendo cálculos e fundamentos acadêmicos para as práticas de uma unidade de produção. O trabalho tem como principais entregas: cálculo de estoques de segurança trimestrais, propostos devido a sazonalidade da demanda (apresentando os potenciais ganhos financeiros em relação ao anual) e levando em consideração as incertezas da demanda e lead time de produção, sendo o nível de serviço limitado em função da tancagem; definição da política de controle de estoques, contendo o cálculo do ponto de ressuprimento; e um comparativo entre os custos de estoque atual e teórico calculado. Além disso, como produto final, foi elaborada e entregue uma planilha de cálculos para uso exclusivo da companhia analisada para que o estoque de segurança e o ponto de ressuprimento possam ser atualizados à medida que as variáveis de entrada sofram alterações. / [en] Aiming to balance market supply and financial goals, avoiding excessive costs with inventories, this dissertation proposes a model of stock management of asphalt for the enterprise in study. The developed management model aims to enhance the current management model, which is based on employees and collaborators experience, introducing measurements and academic grounds to the enterprise practices. This assessment aims to deliver the calculation of the safety stock levels on a quarterly basis instead of an annual basis due to the seasonality of the demand (the potential gains of quarterly calculation compared to the annul calculation will also be presented) and considering the uncertainties of production demand and lead time, the level of service being limited due to the capacity to stock, the definition of the stock control policies, the calculation of the replenishment point, and a comparison between current and theoretical stock costs, including as final product, an automatic spreadsheet for the exclusive use of the analyzed company, to update the variables and calculations when necessary.

Optimizing supply chain is the most successful key for manufacturing systems to be competitive. Supply chain (SC) has gotten intensive research works at all levels: strategic, tactical, and operational levels. These levels, in some researches, have integrated with each other or integrated with other planning issues such as inventory. Optimizing inventory location and level of safety stock at all supply chain partners is essential in high competitive markets to manage uncertain demand and service level. Many works have been developed to optimize the location of safety stock along supply chain, which is important for fast response to fluctuation in demand. However, most of these studies focus on the design stage of a supply chain. Because demand at different horizon times may vary according to different reasons such as the entry of different competitors on market or seasonal demand, safety stock should be optimized accordingly. At the planning (tactical) level, safety stock can be controlled according to each planning horizon to satisfy customer demand at lower cost instead of being fixed by a decision taken at the strategic level. On the other hand, most studies that consider safety stock optimization are tied to a specific system structure such as serial, assembly, or distribution structure. This research focuses on formulating two different models. First, a multi- echelon safety stock optimization (MESSO) model for general supply chain topology is formulated. Then, it is converted into a robust form (RMESSO) which considers all possible fluctuation in demand and gives a solution that is valid under any circumstances. Second, the safety stock optimization model is integrated with tactical supply chain planning (SCP) for manufacturing systems. The integrated model is a multi-objective mixed integer non-linear programming (MINLP) model. This model aims to minimize the total cost and total time. A case study for each model is provided and the numerical results are analyzed.

The subjekt of this diploma thesis is optimalization of inventories in workshop. The thesis is divided into two parts: theoretical and practical. The theoretical part presents the theory of corporate logistic, storage, warehouse and inventories. Furthermore, the methods aplicable for optimalization inventories are mentioned. The practical part is focused on the improvement of storage in workshop. It begins with finding out the cause of high inventories using the Ishikawa diagram and then raw material is separand into groups according Pareto method. After that the sales of each product range is forecasted and on this basis the EOQ (economic order quantity) of raw material are calculated. Finally, the practical part is aimed on processing layout. At the end of diploma thesis there is conclusion and recommendations for future.

This master thesis investigates the comparison between centralized and decentralized warehousing systems, focusing on the variation in safety stock levels and the associated safety stock holding value. The aim of this research is to address the existing knowledge gap by introducing a methodology that utilizes scenario analysis in different potential locations, incorporating a range of plausible future circumstances and integrating them into a sophisticated mathematical model. This proposed approach seeks to estimate the potential inventory savings and corresponding cost reductions achievable through the implementation of a centralized warehouse. Additionally, it aims to examine the influence of different parameters on the anticipated impact of centralization, providing a comprehensive understanding of the potential outcomes. The findings of this case study will contribute to the academic discourse on warehouse optimization strategies as well as it will offer practical guidance to companies in their pursuit of operational excellence and cost savings within their supply chains. This thesis aims to bridge the gap between theoretical knowledge and practical implementation, facilitating informed decision-making processes by the supply chain practitioner and enhancing overall supply chain performance.

Purpose: The purpose of this study was to analyze possible strategies that can be used to improve the efficiency of the spare parts safety stock management in a multinational company which operates in the electronic industry. Research question: “Which safety stock dimensioning strategies are most suitable in an after-sales business environment, characterized by high level customer service and unpredictable demand?” Method: The theoretical framework illuminated the study’s phenomenon which was mainly based on peer-reviewed scientific articles but also academic books. Furthermore, the empirical data collection in this study was conducted through a mixed research approach, where the qualitative data was collected through three semi-structured interviews and several unstructured interviews, while the quantitative data consisted of calculations using numerical variables provided by the case company. Conclusion: The study concluded that the so called estimated safety stock method as well as the probabilistic demand based on history method are the most suitable safety stock dimensioning strategies to utilize in business environments where firms that offer products with unpredictable demand are facing challenges related to finding a balance between providing a high service level and keeping their costs as low as possible. / Syfte: Syftet med denna studie var att analysera möjliga strategier som kan användas för att förbättra säkerhetslagerhanteringen av reservdelar hos ett globalt företag inom elektronikindustrin. Frågeställning: “Vilka dimensioneringsstrategier för säkerhetslager är mest lämpliga i en eftermarknadsverksamhet, kännetecknad av hög servicenivå och oförutsägbar efterfrågan?” Metod: Det teoretiska ramverket belyste studiens fenomen som var baserad på främst expertgranskade vetenskapliga artiklar men även böcker. Vidare genomfördes den empiriska datainsamlingen i denna studie genom en mixad forskningsmetod, där den kvalitativa datan var i form av fyra semistrukturerade intervjuer samt flera ostrukturerade intervjuer, medan den kvantitativa datan bestod av beräkningar med hjälp av numeriska variabler tillhandahållna av fallföretaget. Slutsats: Studiens slutsatser visade att den så kallade manuellt bedömt säkerhetslager metoden samt probabilistisk efterfrågan baserad på historisk data metoden är de mest lämpliga dimensioneringsstrategier för säkerhetslager att använda i affärsmiljöer där företag som erbjuder produkter med oförutsägbar efterfrågan står inför utmaningar relaterade till att hitta en balans mellan att tillhandahålla en hög servicenivå och att ha så låga kostnader som möjligt.

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Purpose – To analyze the impact on total cost by inventory control methods under the influence of seasonal demand. The purpose will be answered with following research questions: What inventory control methods can be used when there is seasonal demand? What is the impact of inventory control methods on total cost under the influence of seasonal demand? Method – The study was conducted as a case study and the empirical data was collected through interviews and document study. Both of these contributed to the basis for the analysis and for the calculations in the test of the study. Literature study was conducted and included theories for inventory control methods to answer the first research question, as well as formulas for the methods used to answer the second research question. Findings – It appears from the study, the inventory control methods that can be used when there is seasonal demand and during current planning environment is periodic ordering system and cycle service method. These have been tested further in the study. Seasonal index was considered an important method since it dimensions demand which to a high degree regulate the inventory levels and thereby the result of the inventory control methods. Further the study compares none theoretical inventory control methods and theoretical inventory control methods impact on total cost. It is shown that carrying costs, as a part of total cost, can be reduced by 25% during the peak season and 62% during off-season. This without changing the deliverability. Alternatively, the deliverability can be increased by 10% by using inventory control methods without increasing the total cost of the inventory. Implications – The theoretical contribution of the study is that it has increased the knowledge concerning inventory control methods when there is seasonal demand, and the possible results they might bring. The empirical contribution of the study is that companies can use the study as an indication of the economic benefits and motivation for implementing theoretical inventory control methods. Limitations – The tested inventory control methods did not alter the ordering cost, which to a high degree can have an impact on the total cost. The study also shows a possible impact on the inventory control during the current planning environment. If the planning environment changes, the result of the study can be different.