• P-ISSN 0974-6846 E-ISSN 0974-5645

Indian Journal of Science and Technology


Indian Journal of Science and Technology

Year: 2010, Volume: 3, Issue: 6, Pages: 693-695

Original Article

Multilevel inventory techniques for minimizing cost-a case study


The inventory problems of most of the manufacturing or trading organization are of great concern. The end item has independent demand and all its component and parts have dependent demand. These component and parts of end item are produced at different stages of production process. Thus, manufacturing of these dependent materials is done at multilevel. Depending upon the capacity of production, cost of setup and carrying inventories, the various parts and components are produced or procured at different level. MRP computes these requirements of material as per time schedule. In order to fulfill these demands of materials at multilevel situation, the production or procurement orders are released for economic batch or lot quantities. In the present paper, the order quantity or lot sizing is obtained by minimizing the cost of ordering plus the cost of carrying the item in stock certainly. Apart from that some constraint such as the availability of space and storing the inventory of these multiple items need to be taken into account.
Keywords: Inventory management, MRP, LOT for LOT, carrying costs, changeover costs. 


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