The development of logistics in companies and its improvement gives a competitive advantage because the general objective of logistics is to increase or maintain customer service with lower costs.
This approach is projected towards the integrated study of basic functions of the organization such as: supply management, transformation process management, physical distribution, physical, financial and informational flows, all closely linked to lower costs. and the greater satisfaction of internal and external customers to the organization (Conejero González, 1997).
The integration of these functions in a global strategy of the organization, places it in a position to raise its competitive level.
There is a close relationship between customer service and inventory management, since the latter is improved, among other aspects, by reducing inventory breakdown. This translates into extreme purchasing efforts towards those products that are most consumed to keep them in inventory.
By establishing a service level in figures, a determined inventory break is accepted and, therefore, the policy for managing supplies is framed within a maximum and minimum range of inventory levels and a previously determined security inventory, which guarantees the level of service established. The range of costs derived from this purchasing policy must also be within the limits that guarantee adequate performance for the organization.
The starting point and entry of the supply chain is supply management. Its importance, from this point of view, lies in the fact that the rest of the organization's functions and its subsequent performance depend on the result of this function.
Among the objectives of supply management we can mention the following:
- Guarantee the delivery to the internal client in the right place, at the opportune moment and at the lowest possible cost, of the products and materials in the quantities and quality required. Provide an uninterrupted flow of materials, supplies and services necessary for the operation of the organization..Keep investments in stocks and reduce losses to a minimum level. Maintain adequate quality standards. Find and maintain competent suppliers. Standardize the items purchased. Buy the necessary items and services at the lowest possible price. Maintain the organization's competitive position. Achieve productive and harmonious working relationships with other departments of the organization.Achieve procurement objectives by ensuring that administrative costs are as low as possible. (Crous et al., 2005; Hernández Ávila, 2004)
Organizing companies to achieve these goals is difficult because not only do you have to take into account internal needs but also those of the outside world. Both the purchasing department and the warehouse have to work in direct contact with the market and have to respond to your solution.
For this reason, the objective of this work is to provide techniques and tools to manage supplies and purchases, to raise the quality of the service provided based on customers.
Development
Each of the proposed methods and techniques will be based on a simplified network of activities, since it is an accurate and efficient instrument for preparing methodological documents. It is also characterized by the sequence of steps to follow, the links or ties, the sequential and hierarchical ordering, coupling all the activities of the same. It is also elaborated applying the principle that the input information of an activity is the output information of the previous activity.
Method for calculating demand forecast.
There are several qualitative and quantitative methods that allow us to make forecasts, one of these methods which is simple and fast to execute with the help of the computer, and also being able to quickly detect and respond to defined changes in the short term is the Exponential smoothing method, as long as it is monitored by specialists to control the alpha (α) value.
Below we list a series of steps that will allow us to calculate demand forecasts from a historical series of a given product.
Figure 1.1 Network of activities to calculate demand forecasts.
Step 1.
Selection of those products to which the forecast will be made. For this we select the use-value variable and apply the Pareto method to find out which ones have been in demand in greater quantities.
Step 2.
Define the values of the smoothing constant alpha (α), between 0 and 1. If the real demand shows stable behavior, we must select a relatively small value of the constant (α) and if it presents significant changes in the short term, the value should be bigger.
The value of the smoothing constant that was selected was 0.3, since the real demand for the product in the previous year behaved in a stable way.
Step 3.
Apply the following formula with the help of an EXCEL spreadsheet.
Where:
Ft: Predicted Demand.
At: Real Demand.
α: Smoothing constant
Step 4.
To check if the value of the selected smoothing constant is correct, we must calculate the MAD (Absolute Average Error) that provides a measurement of the average forecast error and the Tracking Signal (TS) that measures the forecast deviation from the variation in demand, which are mathematically defined by the following expressions:
It can be seen that the signal
Tracking Signal (TS) is a calculation of the trend in the numerator, divided by the most recent MAD estimate, so if the variations in demand are assumed to be random, then the control limits of ± 6 in the tracking signal ensures that only in a maximum probability of 3% these limits are exceeded by chance.
In this way, when the tracking signal is outside the range of ± 6, the forecast method must be stopped, the demand must be re-observed and it can be estimated with the selection of another value of (α).
Demonstration of the proposed method.
Note: This procedure was applied in a warehouse belonging to the Central Railway Company specifically to the family of laminates.
Step 1.
The results of the inventory stratification to know the annual circulation of the products expressed in tons can be seen in Annex 1. Below are those products that were in greatest demand in the year.
Table 1.1 Consumption in tons of the «A« family products: laminates.
Once the most relevant products and those that are most in demand have been defined, we proceed to calculate the forecast of the demand for these products for the year 2015, in this case we will take the 200mm U-Beam as an example, for which we have consumption monthly from the previous year.
Step 2.
The value of the smoothing constant that was selected was 0.3, since the real demand for the product in the previous year behaved in a stable way.
Step 3.
The result of the application of the formula is shown below, note that the real demand for January is taken as the first forecast (February), this happens because the application of the method requires a first forecast (or starting point) and frequently the actual data from the previous period is selected.
Table 1.2 Demand forecast for the 200 mm U-beam product.
Step 4.
Below you can see the results of the MAD and the SR, here is a summary, where it can be seen that the SR does not exceed + - 6, so the forecast is accepted.
Table 1.3 MAD and TS calculation.
Inventory management procedure.
The simplified network of activities for the Design of inventory management parameters is shown below, and how the activities involved in their legend are related.
his legend.
Figure 1.2 Network of activities for inventory management.
| 1. Study of the company and its environment. | 9. Calculate the order batch. |
| 2. Analysis of the nomenclature. | 10. Calculation of order issuance costs. |
| 3. Apply layering method | 11. Calculation of maintenance costs |
| 4. Consult experts by area. | 12. Determine the economic lot of the order. |
| 5. Selection of inventory management method | 13. Calculate the safety stock. |
| 6. Method Q. Determine parameters to calculate. | 14. Calculate the level of replacement. |
| 7. Method P. Determine parameters to calculate | 15. Apply the parameters and check |
| 8. Determine Required Stock | 16. Continue to apply G. Inv. with the design parameters. |
LEGEND
Procedure to design the parameters of inventory management.
- Study of the characteristics of the company and its environment.
You must know the characteristics of the company in terms of the distribution of the warehouses, their size, the corporate purpose of the internal clients to whom it offers services, as well as consumption levels of the most important clients. It is also important to consider the location of the main suppliers and clients.
- Analysis of the nomenclature. Apply layering method.
The second step is the analysis of the nomenclature of products, their physical-chemical characteristics, requirements for storage, need for a controlled environment (temperature and humidity), choosing the use-value variable, and applying the ABC method.
- Consult experts by area and 4. Adjust product strata.
These two activities are analyzed together because one leads to the other, and the analysis with the experts is to include and expand the previously established strata, the adjustment being carried out almost simultaneously with the consultation. In the sphere of transport, the schematic application of the ABC can lead to serious omissions, so specialists should be consulted. The consultation consists of circulating the result of the ABC through them so that they can include those products that are essential for them. Then these products will be added to stratum A, and in addition there may be the case of a product that is in C and it is understood that it must be in B.
- Selection of inventory management method by product.
There are several methods to manage inventories, for example for products that suppliers deliver to company warehouses, the “P” or periodic review method is recommended and the (Q) or perpetual inventory method for the products that are managed. purchase according to needs.
- Method Q. Determine parameters to calculate.
In this Fixed Lot System, perpetual inventory or “Q” method it is determined How much to order? through the economic order lot formula; which as its name implies is the cheapest amount of product to buy where the costs of issuing orders and inventory maintenance are balanced. The mathematical formula for calculating this element is as follows:
Where: LEP: economical order lot
A: annual consumption of the product
k: constant that is determined through the formula:
Where B is the cost of issuing an order and I is the cost of maintaining the inventory. Both elements are inversely proportional, that is, the higher the cost of issuing an order, the lower the cost of maintaining inventory and vice versa.
From this activity to follow the logical sequence of the Network, it is necessary to continue with the branch that deals with the process of calculating the parameters using the Q method or Perpetual Inventory and which continues with activities 11,12,13,14 and fifteen.
- Inventory maintenance cost calculation.
For its part, the inventory maintenance cost includes the following elements:
- Cost of immobilized money Losses due to obsolescence Cost of handling and storage Conservation Damage and deterioration Filtration and raterism Insurance and taxes Control costs Energy Energy and equipment and facilities amortization.
- Calculation of order issuance costs.
The cost of issuing orders (B) includes the following aspects:
- Costs of processing the order form:
- Preparation of the order Determination of the quantity to order Request the price offer to the suppliers Send the order
- Cost of monitoring the order and guaranteeing its delivery on time:
- Telephone calls Fax Travel made by buyers to ensure delivery of the order.
- Cost of receiving the order:
- Unloading cost Qualitative and quantitative inspection Transfer of materials to the storage area Preparation of reception reports Entry in the records of the materials received.
- Cost of processing invoices:
- Actions of comparing invoices with the receipt report Carry out payment and subsequent audit
- Determine the economic lot of the order.
Determine the economic order batch from the costs of issuing orders and inventory maintenance through the following mathematical formula
LEP = 2 * CEP * DT
i C
I = ix C
B = D x S
Where:
Q *: Economic Order Lot.
S: Cost of Issuing an Order.
D: Total demand for product in the period analyzed.
C: Cost of acquiring a product unit
i: Inventory Rate. % that represents the Cost of Storage with respect to the Total Annual Cost.
- Calculate the safety stock.
Service level, inventory level, and security inventory
One of the indicators or meters of the service level (NS) is the availability of the product or service, for this reason it is recommended to maintain a safety inventory that allows satisfying demand, providing a level of service that considers uncertainty in the event of unforeseen events.. The sources of uncertainty that justify the safety inventory are the following:
- Uncertainty in demand. Differences between expected and actual demand, which are normally the most important source of uncertainty. The forecast error originates from this source of uncertainty. Uncertainty in delivery (delivery time). Uncertainty in quality, that is, the quantity of imperfect products in the order, which is usually small.
For these reasons, it is very convenient to decide what proportion of the demand you want to satisfy, that is, what frequency of inventory breakdown the entity is willing to face, which is equivalent to saying what level of service is desired. In turn, the availability of the product is identified with the quotient of the days in existence between the total days in the analyzed period, while the inventory break would be its reciprocal and would measure the proportion of non-service. For example, if you decide to set a 90% service level, then an inventory break is accepted on 10% of orders.
When it comes to establishing a safety inventory to deal with uncertainty in forecasting demand, you need to know:
- A measure of forecast error, originated in the uncertainty of the demand due to its random fluctuations, for which there are different methods in the literature (see, among others, Medina León / Nogueira Rivera 2003). What level of service do you want to establish.
Establishing the optimal level of a service or the availability of a product depends on the cost of breaking the inventory. It must be evaluated to accept a risk, for example, of 10%, if it is decided to reduce the risk of rupture from 10 to 5%, it will be necessary to check whether the advantages, which represents the additional cost that would be incurred by having to increase the security inventory and therefore the amount of money invested in inventory will be greater.
However, it is difficult to calculate the breakdown cost, since it includes elements that are difficult to measure, such as loss of profits and, above all, customers, with the consequent cancellation of future orders. In some cases, it is possible to estimate the breakdown cost, valuing, for each level of safety inventory, the probable number of operations that would be lost.
It is assumed, for this analysis, that the demand frequency distribution fits a curve of a normal distribution, with its characteristic values of the mean and standard deviation.
As the standard deviation of demand is an indicator of its fluctuation around the mean in the historical series taken as the basis for the forecast, its increase and the subsequent departure from that central trend constitutes a forecast error and is a source of failure in the service (inventory breakdown) during the period in which the demand must be satisfied at the expense of what is stored (supply period in system Q and supply period plus revision period in system P). This forecast error, which must be compensated with the safety inventory, can be estimated as a function of Z.
(Normalized standard deviation):
- If it is NOT, the activities carried out are not reviewed.
This is the link where the feedback of the procedure is met, in case the expected service levels are not met, it is necessary to review each activity.
- Continue to apply the GI with the design parameters.
They will be periodically reviewed to see the performance of each product in a given period of time or season, in addition to monitoring those newly acquired products and have not been previously studied.
Demonstration of the proposed procedure.
Analysis of the nomenclature.
The analysis of the nomenclature is basic for the evaluation of each product, it must be done at the assortment level, in order to identify each assortment by product families for subsequent inventory studies. So the activities listed and explained below always refer to that level of detail.
List the products: It is sometimes recommended the convenience of grouping them by similar operational characteristics, it is also recommended to list them in a table where the different data related to the product will be placed later.
Characterization of circulation conditions: It is essential to determine the annual circulation level, that is, the total quantity of products expressed in monetary units.
Stratification of the ABC inventory: In order to know which are the fundamental (laminated) products and which cannot be missing in stock, the Pareto Method is applied to this family of products, taking into account the criteria of:
- Product consumption in value. Refers to the warehouse exits of each assortment in values in a year.
Below are the A products that represent 80% of the criteria of the total of the 87 products that make up this family, according to the selected criteria
Table 1.4 Consumption in values of the «A« products of the family: laminates.
Determination of the variables (batch sizes) of the inventory.
Next, the variables of the inventory to the product that was taken as an example above will be determined (U beam of 200 mm), The «Q» method is chosen, since it is the most feasible for those products to which its purchase is managed according to the needs that arise.
To determine the size of the economic order lot (LEP), the inventory maintenance cost (I) and the order issuance cost (B) were previously calculated.
Inventory maintenance cost.
I = ix C
Annual inventory maintenance fee
i = 13%
Acquisition cost of one ton of 200 mm U-beam.
C = $ 4935.17
I = 13% x $ 4935.17
I = $ 641.57.
Order issuance cost.
B = D x S
Total demand for the product.
D = 61,089 Tons.
Cost of issuing an order.
S = $ 10.60
B = 61,089 x $ 10.60
B = $ 647.54
Once the two previous costs have been calculated, we proceed to determine "K", to subsequently determine the value of the economic order lot.
Economic batch of the order.
The economic lot of the order of the exemplified product amounts to $ 779.68, since it is at this level where the costs of issuing orders and inventory maintenance are balanced.
Safety stock calculation.
The difference that exists between the expected and the actual demand constitutes a source of uncertainty and this gap can cause the unavailability of a given product, it constitutes the forecast forecast error and will constitute the value of the safety inventory.
In this case, the MAD (absolute mean deviation) will be taken, which was previously calculated in section 3.1 (See Annex 7)
Safety stock = 4,935 tons
Replacement level calculation.
Average daily demand (D) = 0.286 tons
Delivery time (Ps) = 6 days
Safety stock = 4,935 tons
Nr = D x Ps + SS
Nr = 0.286 x 6 + 4.935
Nr = 6,651 tons
When the inventory drops to 6,651 tons, a new order must be placed equivalent to the economic lot of the order that was previously calculated.
Recommendations on the tender of suppliers.
In the literature it is reflected as in the years before the 1970s, dealing with suppliers was characterized by maintaining a tough position, demanding, distanced , the buyer was like a "king" who treated his suppliers as "subjects, then after the mentioned time ,when development paradigms and competitiveness change, who governs the business activity, the quality criterion is imposed by the client, not the producer, and the focus on the client is the “compass” of the business, relationships with suppliers change and relationships are established durable and humane, with real trust and the “win-win” philosophy with the aim of incorporating them into the organization, and creating strategic alliances in order to better satisfy the end customer who is increasingly demanding.
Procedure to evaluate suppliers.
It is demonstrated by practice that a good relationship with suppliers offers important competitive advantages such as those listed below:
- Processes with shorter cycle times. Reduction of operating costs. Eliminate and anticipate excess inventories. Use of storage spaces while maintaining adequate inventory levels. Guarantee of delivery cycles. Effective control of goods in transit. Control cost reduction quality due to increased reliability of deliveries.
However, to form true bonds of trust and strategic alliances with suppliers, it is necessary to study them and get to know them well so as not to have unpleasant experiences and surprises.
To evaluate suppliers, different authors agree on a group of criteria that are set out below:
Supplier evaluation criteria.
Positioning: - investment in product image.
- supplier reputation.
Product - assortment: - breadth of the line.
- depth of the line.
- Quality.
- Ability to deliver new products v / s competition.
Supply: -Availability of inventory.
-Ability to use the supplier's warehouses.
- Quick delivery.
- Compliance with delivery times.
-Quality of information. etc.
Prices: - Price.
- Discounts.
- Financing.
Communication: - Supplier-consumer advertising.
- Promotion of the provider-consumer.
- Training of sales forces.
- Supplier cooperation in company advertising.
Procedure to evaluate suppliers.
In the near future, the evaluation of suppliers must be a requirement in the business, in search of better efficiency and effectiveness, at the moment transport companies and especially the railways do not have many options to select suppliers to satisfy their numerous needs, but as mentioned above, the emergence of cooperatives of different types, within the framework of compliance with the Guidelines, which are gradually incorporated into the supply processes of state companies, will provide opportunities for new products and services, is For this reason, companies must prepare to be able to select the appropriate supplier to fulfill the function of supplying the different products demanded.
In order to solve this problem, the procedure shown in the Activity Network in figure 3.2 is proposed, where the activities are arranged sequentially and hierarchically, and are described in the corresponding legend.
Figure 1.3 Network of activities to evaluate suppliers
Legend of the proposed procedure .
- Establish needs or requirements to the supplier. Determine the weighted values of each element by means of the distribution of points. Evaluate from 5 - 1, each of the characteristics of the elements or requirements in each supplier. Determine the value assigned to each supplier and comparatively evaluate all suppliers. Compare the results obtained with each supplier to adjust performance.
Exercise. # 1: Requirements to the supplier:
1 - Inventory availability.
It is the ability of the supplier to respond affirmatively to the request for a product, is to have no stockout.
2 - Product quality.
Comply with all the parameters required by the client. These parameters may vary according to the product and the customer.
3 - Speed of delivery. Compliance with the order - delivery cycle.
The order-delivery cycle is the time that elapses from when the order is placed until it reaches the customer's warehouse. The fulfillment of this is the possibility that provisioning arrives in a timely manner.
4 - Reliability of orders.
It is the fulfillment that all the assortments that were requested were delivered and in the quantities requested. Errors in dispatches are very common and products are sent that are not requested or not in the quantities ordered.
5 - Ability to deliver new products v / s competition.
A very important capacity of a supplier is the agility they have to respond to requests for new products, since frequently the change in consumer tastes forces hotels to place emergency orders with new customers and it is very important to be able to count on providers that guarantee fast and effective responses.
6 - Possibility of using the supplier's warehouses.
The ability to "save" inventory levels in the supplier's own warehouses provides competitive advantages to the customer, as they would have less inventory maintenance costs, 7 –Timely information on orders.
It is common for customers to need to know the status of an order placed, so they will ask the provider, either by phone, email or fax, the status of a specific one, the speed of response and its precision are values that the client will appreciate, because it will allow him to make important decisions that will allow him to give competitive responses to his consumers.
8.- Prices.
Obviously, obtaining similar quality products for better prices is always a very attractive advantage, although in our environment in most cases prices are not negotiable, so they lose weight in evaluations. However, if these conditions change, it is a very important element to consider.
9.- Possibility of Transportation.
The transport service provided by the supplier can constitute a competitive advantage if it is at an advantageous price, despite the fact that the client has transport for supplies, it is often more feasible to contract it with third parties since it is more profitable. This is not always the case, but it is important to analyze this possibility taking into account each provider.
These are some of the most common demands or requirements for suppliers that can be found in the specialized literature, however the Cuban environment has certain characteristics that must be taken into account when evaluating suppliers, so these must be subject to an analysis of company experts committed to the sourcing and purchasing function so that those that will be important in decision-making can be determined.
Once the different aspects of the suppliers that can be evaluated by a client are established, they are submitted to the experts so that they can choose those that may be more important for the case analyzed in the Central East Railway Company.
From this list the experts chose 5 aspects.
- Inventory availability Product quality Fast delivery Compliance with the order - delivery cycle. Reliability of orders. Possibility of transportation.
Exercise. # 2.Determine the weighted values of each element by distributing points.
The point distribution technique was then applied, from the awarding of 10 points to each of the 5 aspects to evaluate suppliers by 6 experts.
| Expert Criteria | one | two | 3 | 4 | 5 | 6 |
| 1. Inventory availability. | 4 | 5 | 3 | 3 | 4 | two |
| 2. Product quality. | two | one | 3 | 1.5 | 2.5 | 2.5 |
| 3. Speed of delivery. Compliance with the order-delivery cycle. | 3 | two | one | 3 | two | 3 |
| 4. Reliability of orders. | 0.5 | 1.75 | two | 0.5 | one | 1.5 |
| 5. Possibility of Transportation. | 0.5 | 0.25 | one | two | 0.5 | one |
The results of this analysis were:
| 1. Inventory availability. | 3.50 |
| 2. Product quality. | 2.08 |
| 3. Speed of delivery. Compliance with the order-delivery cycle. | 2.34 |
| 4. Reliability of orders. | 1.21 |
| 5. Possibility of Transportation. | 0.87 |
These numbers represent the weighted weight of each aspect in the final evaluation of each supplier.
Once the weighted value of each aspect of the evaluation has been determined, tables are drawn up to assign the points of 5 - 1, with which the suppliers will be rated according to their performance.
Exercise. # 3. Rate 5 - 1, each of the characteristics of the elements or requirements in each supplier.
As there are 10 points distributed among the 5 evaluation criteria, and each criterion can be evaluated up to 5 points, then the maximum number of points or 100% is 50 points.
Below are the evaluation tables for each selection criterion.
- Inventory availability. points
There is always what is requested: ------------ 5
The order is found up to 90% of the time. ---- 4
The order is found up to 85% of the time.---- 3
The order is found up to 80% of the time.---- 2
The order is found less than 80% of the time --- 1
2 - Product quality. points
The quality meets all the required parameters.------- 5
The quality meets 95% of the required parameters.----- 4
The quality meets 90% of the required parameters ----- 3
Quality meets 85% of the required parameters ----– 2
The quality meets less than 85% of the required parameters. - one
3 - Fulfillment of the order - delivery cycle. points
Complete the delivery in the agreed time.------------– 5
Delivers delivery in the agreed time with 12 h delay ----- 4
Delivers delivery in the agreed time with 24 h delay ----- 3
Delivers delivery in the agreed time with 48 h delay ----- 2
Delivers delivery in the agreed time with + 48 h delay --– 1
4 - Reliability of orders. points
100% of the requested orders are delivered without errors ----- 5
95% of the orders requested are delivered without errors ----– 4
90% of the orders requested are delivered without errors ----- 3
85% of the requested orders are delivered without errors ----- 2
Less than 85% of requested orders are delivered without errors - 1
5 - Possibility of Transportation. points
100% of orders are transported at a lower cost than other options.-– 5
80% of orders are transported at a lower cost than other options. -- 4
100% of orders are transported at a cost equal to other options. --- 3
70% of orders or less are transported at a lower cost than other options
and 30% at a cost equal to or greater. -------------------- two
50% of orders or less are transported at a lower cost than other options
and 50% at a cost equal to or greater. -------------------- one
Activity 4. Determine the value assigned to each supplier and comparatively evaluate all suppliers.
This procedure was applied to the main supplier of the UEB Logistics CE with the result shown below.
This provider, National Logistics Company, belonging to the Cuban Railways Union, is the main provider of products such as (spare parts, laminates, etc.)
| Experts
Criteria |
Not
Weighted |
one | two | 3 | 4 | 5 | 6 | Total Sum and Average Value | Evaluation |
| 1. Inventory availability. | 3.50 | 3 | 4 | two | two | 3 | 4 | 3.0 | 10.5 |
| 2. Product quality. | 2.08 | 4 | one | 3 | 3 | two | 4 | 2.83 | 5.88 |
| 3. Compliance with the order-delivery cycle. | 2.34 | 3 | 4 | 4 | 3 | two | 3 | 3.16 | 7.39 |
| 4. Reliability of orders. | 1.21 | 5 | 4 | 4 | 3 | 4 | 3 | 3.83 | 4.63 |
| 5. Possibility of Transportation. | 0.87 | 5 | 4 | 4 | 3 | 4 | 5 | 4.16 | 3.61 |
| Total | 32.01 |
The total sum of the evaluation criteria is 32.01, which in relation to the 50 total points that a supplier evaluated with the procedure can achieve would reach 64.02% of the maximum possible performance, a number that can be compared with that of another supplier who submits to that procedure.
This procedure can be applied in suppliers to have them evaluated and to be able to negotiate with them the improvement of their performance on documented and argued bases, then when the environment changes and the management of the complex can decide who to buy then they will apply it to the other suppliers and select that one. have a better performance.
- Compare the results obtained with each provider to adjust performance.
After performing these calculations, their performance is compared and valued, and they could choose which one is optimal for the company.
Conclusions
- Calculating the demand forecast using the simple exponential smoothing method gives the company a quick and easy way to make forecasts, allowing you to plan purchases more effectively. The proposed procedure for designing the parameters Inventory management provides the company with a technically argued tool for these calculations and the development of this management in an efficient way that will allow it to increase the availability of products and therefore raise the quality of the service. The stratification of the product nomenclature provides information on the most important and key products for the company, which represents an important element for decision-making.Through the proposed supplier evaluation procedure, suppliers can be evaluated in an integral and independent way, based on their deficiencies, providing the appropriate information for decision-making in the contracting process.
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