The purpose of the thesis was to develop a method that simplifies the analysis between reduction of delivery lead time and inventory costs, when the reduction of delivery lead time is achieved through repositioning of the customer order decoupling point.

The Product Life Cycle (PLC) is based upon the biological life cycle. Through the period of development it is introduced or launched into the market, and the change of sales, the product will experience sprout, maturity, shrink and even die out. The classic product life cycle has four stages: Introduction; Growth; Maturity and Decline. In the complex and rapid variation of business environment, PLC is even shorter than before; the well sell product today maybe is the unsalable stocks tomorrow. Demand volume of product is constantly changing in every PLC stages; what¡¦s the impact for financial performance in inventory cost under different inventory strategy and profit variations, there are dynamic complexities inside with some special properties like non-linear, interconnected, time delay and counter-intuitive, etc. Therefore, this research is using System Dynamics which has been normally used to resolve dynamic complexity problems as the study method to build up a model to simulate all of the inventory strategy in inventory theory that consider the trade off between all kinds of inventory cost to probe into the impact of financial performance in different PLC stage for different product types to figure out the variation developments of all inventory costs. Some conclusions were generalized from the study as following: 1. This study builds up a developmental systemic model which is able to analysis the variation developments between inventory strategy and inventory cost for retail industry. The model includes all of inventory related molds like inventory,inventory strategy, all cost related to inventory, inventory performance measurement, etc. 2. The development systemic model is a very effective tool to support policymaker to measure inventory strategy and financial performance within a short time, to improve the management performance by using the best inventory strategy. 3. The development systemic model built up by this study can different products in different PLC stages and also considering their cost structure to analysis the impact between inventory strategy and inventory cost and variation developments of it.

Abstract In many business management policies, the inventory management and decision - makings have been the very important of the business administration. The object of the inventory management is satisfy the customer demand with minimum inventory cost; and the inventory policy is how to decide the quantity or timing of every order times, that can reach the object of the inventory management. Today aims at the supervision strategy of the business inventory system, is still to make use of mathematics and statistics computational method, compute the most economic order quantity (EOQ), the best opportune moment of reorder point (ROP). However the item of the inventory cost that have got trade off relation, inventory service level setting that also have got trade off relation with the total inventory cost. The different inventory policy relates to the different stockholding cost assemble, all operators of the business practice is looking for the balance point between service and cost, the complex relation in this dynamic state, is not a general intuition thinking, simple computing criterion, can acquire among the best solution. So this paper makes use of the System Dynamics simulation tool that is good to solve of the complex problem tool, establish the System Dynamics (SD) model, and aim at the inventory policy, inventory cost, service level setting and out-of-stock strategy to do the system simulation analysis application. Through the study of this paper, can induce following research results: 1. This paper create a System Dynamics (SD) model that can analyze the dynamic relationship between the inventory policy and inventory cost , this model includes the fundamental inventory policy, each related cost of inventory, evaluation the performance of the inventory policy etc. 2. The dynamic model that via this paper create, among the different inventory policy, explore the situation of change of the individual of inventory cost, and analyze the dynamic state of the inventory cost assemble, service level setting and businesses to operate the performance change. 3. Study of that none shortage cost and make use of the stockout strategy to reduce other inventory costs, under the different scenario of the sales, the different ABC class of the goods, applied different inventory cost combine and the setting strategy of the service level, do the dynamic state simulation analysis for business performance. 4. Study of the impact of the business, when the business at the service level set and stockout strategy usage is not appropriate. Keyword: System Dynamics, Inventory Policy, Inventory Cost, Service level, Stockout Strategy

<p>This paper presents the feasibility study of setting up the new potting tray production line based on the two alternatives: partly outsource a process in the production line or wholly make all processes in-house. Both the qualitative and quantitative approaches have been exploited to analyze and compare between the make or buy decision. Also the nature of business, particularly SMEs, in Thailand has been presented, in which it has certain characteristics that influence the business doing and decision, especially to the supply chain management. The literature relating to the forecasting techniques, outsourcing decision framework, inventory management, and investment analysis have been reviewed and applied with the empirical findings. As this production line has not yet been in place, monthly sales volumes are forecasted within the five years time frame. Based on the forecasted sales volume, simulations are implemented to distribute the probability and project a certain demand required for each month. The projected demand is used as a baseline to determine required safety stock of materials, inventory cost, time between production runs and resources utilization for each option. Finally, in the quantitative analysis, the five years forecasted sales volume is used as a framework and several decision making-techniques such as break-even analysis, cash flow and decision trees are employed to come up with the results in financial aspects.</p>

This paper presents the feasibility study of setting up the new potting tray production line based on the two alternatives: partly outsource a process in the production line or wholly make all processes in-house. Both the qualitative and quantitative approaches have been exploited to analyze and compare between the make or buy decision. Also the nature of business, particularly SMEs, in Thailand has been presented, in which it has certain characteristics that influence the business doing and decision, especially to the supply chain management. The literature relating to the forecasting techniques, outsourcing decision framework, inventory management, and investment analysis have been reviewed and applied with the empirical findings. As this production line has not yet been in place, monthly sales volumes are forecasted within the five years time frame. Based on the forecasted sales volume, simulations are implemented to distribute the probability and project a certain demand required for each month. The projected demand is used as a baseline to determine required safety stock of materials, inventory cost, time between production runs and resources utilization for each option. Finally, in the quantitative analysis, the five years forecasted sales volume is used as a framework and several decision making-techniques such as break-even analysis, cash flow and decision trees are employed to come up with the results in financial aspects.