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On the Strategies to Optimize the Inventory of Auto Parts under the Supply Chain Environment

Author: ZhangHong
Tutor: HanLiang
School: Chang'an University
Course: Business management
Keywords: supply chain auto parts inventory control optimizing management heuristic algorithm
CLC: F274
Type: Master's thesis
Year: 2013
Downloads: 38
Quote: 0
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Abstract


With China’s entry into WTO and the strengthening of the global economy integration,the car ownership of China has increased year by year, followed by the growing demand forauto parts. As a result, auto market in China, especially the auto parts market, has hugepotential. It is showed according to statistics that auto parts sale has become the largest profitsource in the automobile industry with the shrinking profit in car sales.As material support,the management of auto parts is getting more and more attention. Parts of After-sale serviceare of great importance in the supply chain. What’s more, inventory of auto parts not onlydecides the service cost, but limit the response speed and quality of the after-sales service. Inthis sense, it is a very important content in enterprise management.In the21st century, the competition between auto parts enterprises has evolved into thatbetween supply chain managerment. Therefore, the research analysis on inventorymanagement has an important role in the supply chain management. The research andanalysis on multistage stock cost optimization of auto parts supply chain, delicateclassification to products by means of inventory control method and applying relevantinventory management have important significance to reduce auto parts inventory cost anddevelop auto parts enterprises.Inventory expense of auto parts takes a large proportion in the whole accessory cost.Therefore, it is of great significance for automobile enterprises to effectively reduce theaccessory inventory. In this paper, the author tries to figure out how to reduce the accessoryinventory in order to cut the accessory expenses under the supply chain environment, andpropose effective solutions on the basis of systematic analysis of the features and problems ofthe current auto parts inventory. At first, start with supply chain and the theory of supplychain managements, this paper discussed the research significance and literature review anddevelopment trend at home and abroad of supply chain inventory management. In addition,this paper sorted and classified the existing research results which would be taken as thetheoretical foundation of this research. Taking the auto parts company H as a case, the author,starting from the supply chain as a whole, makes a reasonable classification of the auto parts with the combination of ABC and CVA classification. Aiming at reducing the accessoryinventory cost, the author also tries to establish the calculation model of multi-objects underthe multistage inventory, and uses genetic algorithm to solve it and determine the safe stock,order point and order quantity. The original inventory control model only takes ordering cost,storage costs and other factors into considered in. However, the author, in this paper, alsoanalyzes the shortage loss and accessory damage cost while establishing the model. In thisway, not only can the inventory expenses be effectively reduced, but also the serviceresponding quality and brand image of the enterprises can be improved. Nevertheless, thisplan is feasible only under ideal environment.Automobile industry supply chain management is a prosperous industry and full ofopportunities and challenges. The development stratagem research for this industry will makeautomobile manufacturers have a right understanding for the operation circumstances,operation directions and operation abilities, carrying forward their merits but avoiding defects,considering the situations, maintaining their advantages in the new century’s heatedcompetitions.

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