Calculation and Comparison of Optimal Stocks under Variable Conditions

     For a period of three months, theoretical research was conducted to find the Optimum Stock Levels, with support from renowned professors, books, and studies worldwide. While the Optimum Stock varies depending on each business and industry, our project enables us to consistently achieve the most accurate results. I am open to discussion on this matter. The project encompassed studies on the optimal stock and order quantity, taking into account variable lead times and variable demand conditions, and the work was conducted accordingly.

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• Determining Constraints

• Service Level

• Demand Management and Evaluation

• Supplier and Delivery Time Evaluation

• Cost Determination and Management

• Identification of Risks (Cost, Supplier and Delivery Times, Demand)

• Raw Material Management

• Determining Stock Levels

• Determining Order Quantities

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When we started this project, we began with very limited software knowledge. Through our determination and passion, we were able to reach this level in 9 months. That's why we know that there is always room for improvement in the software aspect. The most crucial aspect of this project is not just the software, but the solutions we technically developed. We are aware that completing this project along with its software in 9 months was a challenging situation, and yes, we are proud to have achieved it! We can achieve a significant efficiency in stock costs. Two Industrial Engineering students combined their visions in their thesis project and found a way to reduce costs in stock management. MSSQL and C# were used in the production of this project, and every detail was done by us. During this process, we conducted extensive research, sought opinions from valuable professors, utilized simulations, followed the market and leading companies, and most importantly, we wanted to create value with the work we did.

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Material Management 

 

In the Material Management Screen, detailed information about the products is entered. Information regarding material dimensions and weights is excluded from the thesis topic and therefore not included in the program. If there are previously entered and calculated materials in the Material Management screen, the program will also display the optimal order quantities and the calculated method among the information. The displayed information includes the following:

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Calculating the Optimal Order Quantity

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The program offers several ordering methods, including Economic Order Quantity, Single-Period Decisions, and Quantity-Based Discounts.

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Based on your current situation, the program will select the most optimal ordering method and display the order quantity to you. For each calculation method, the program will take into account all your lead times and either your demands or the anticipated production quantities. In the background, it will also utilize various cost calculation methods.

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Economic Order Quantity (EOQ): Taking into account variable lead times and your demands, statistical methods are combined to find the most economical order quantity. Many costs are included in this calculation, from ordering costs to holding costs. Constraints like order batch size are also considered. Six different options have been created for various situations. With these options, you can calculate your order quantity for different scenarios. Here are these situations:

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Quantity-Based Discounts: Your suppliers may have provided you with different prices based on different order quantities. By entering the quantities and corresponding prices in the program, you can enable the program to show you your optimal order quantities. The program will analyze this situation using scientific methods, perform cost calculations in the background, and provide you with the most suitable order quantity. It will take into account all the costs you input. While companies put in separate efforts for these calculations, we achieve results within seconds.

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The six different options mentioned above are also available in this calculation method. Your costs, demands, lead times, and batch sizes are presented to you with technical details through these six different options. This way, you can find the optimal order quantities for different prices.

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Single-Period Decisions: The program also utilizes this calculation method for perishable and limited-lifespan products. It finds your optimal order quantity by comparing your holding costs with your ordering costs. Inspired by the newspaper boy problem, the single-period decision method determines the optimal order quantity for your products with expiration dates.

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Supply Chain Create Order Page

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It was designed for the Supply Chain Department to be able to create their orders and keep detailed records of lead times. When the Supply Chain officer places an order for each raw material, they enter it into the program. The program updates inventory information, records the order date, and saves it in the database to use for calculating optimal stock levels and required lead times, taking into account averages and standard deviations. Additionally, when the business receives the material, they update the quantity received and the date, changing the order status from "order placed" to "shipped" in the program. This way, the program records the lead times and updates the received inventory.

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Production Planning Create Order Page

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A page was created for the Production Planning team to be able to use the products from the materials inventory that the business receives. The Production Planning team places orders for a specific quantity of materials from the business's inventory for the products they want to produce. The Supply Chain Department simultaneously sees these orders and plans their orders accordingly. This page was created for this reason.

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Demand History Page

 

You can enter the demand quantities previously produced or forecasted by the production planning team through the demand page. This is one of the important factors that will increase the accuracy of your calculations. While finding the optimal order quantities, we can provide manual input for many demand data points. Additionally, you can enter the monthly demands for the materials you actively use from here. This will also support you in finding your reorder point and safety stock.

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Supplier Management

 

The page allows you to manage your suppliers and indicates which materials you procure from which suppliers. A supplier evaluation system will also be added to this page. Here, you can assess your suppliers based on criteria such as:

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• Quality of received materials,

• Price,

• Defective materials,

• Lead time,

• Quantity of received materials.

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This system will evaluate your suppliers based on these criteria, provide comparative pricing information, and offer you alternative suppliers. This will enable you to work with the most optimal cost by leveraging alternative suppliers, rather than relying solely on one supplier.

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Information Page and Contact

 

We have confidence in our work. We are open to all ideas, constructive criticism, and communication. We are interested in undertaking more advanced projects, and we are confident that one day we will develop solutions that will revolutionize the Supply Chain. Until then, stay tuned!

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​​​​Other Projects We Believe Can Contribute to the Project:

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• Warehouse Management and Planning (Adding Material Volume and Weight Information to the System, Managing in Comparison with Warehouse Space)

• Supplier Selection Studies - Supplier Evaluation - Process Capability

• Supply Chain Optimization

• Cost Analysis and Cost Reduction Projects (Incorporating into the System)

• ERP, MRP Projects

• Supply Chain and Artificial Intelligence

• BOM (Bill of Materials)

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This project, including all content and materials listed below, is legally owned by the following party:

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Ugur Sayer

Hamburg/DE

ugursayer1@gmail.com

ugursayer.com

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Among these contents are, but not limited to, texts, graphics, images, logos, sounds, videos, and other media types. All of these contents are protected by copyright and other intellectual property laws. No data related to the company involved in the project has been shared due to privacy policies. Representative figures and letters have been used in program visuals.

No content in this project may be used, reproduced, distributed, displayed, or published without prior written permission. We reserve the right to take legal action in the case of unauthorized use.

This copyright notice is effective as of October 27, 2023 and applies throughout the entire process of the project.

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• Ugur SAYER

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