Determination of production and inventory control policies: An application in plastic industry

Today, in the face of rapidly evolving technology, it is becoming a necessity that businesses keep up with this pace. Businesses can only survive their competition if they achieve such continuous evolution. Therefore, correct planning is crucial for these businesses. With careful planning strategies, possible problems can be detected earlier and prevented. With the right kind of predictions and production plans, businesses can cut serious costs and provide customer satisfaction. At this point, planning becomes more important for inventory-based businesses. In terms of costs, the prevention of unnecessary inventory investments, use of an appropriate inventory policy and correct estimation of the amount of future sales should provide huge gains. In this study, for a company in the plastic industry, strategies of creating an inventory policy for high-priority products in terms of inventory values and identification of production batch sizes by performing a prediction for upcoming periods are investigated. For inventory classification, a new proposal is formed by comparing ABC classification systems, which are recently proposed in the literature and for identified A-class products demands are predicted including the next year. Based on estimates, a comparative analysis on deterministic and stochastic models is performed in order to determine production batch sizes.