INVENTORY MANAGEMENT WITH STOCHASTIC DEMAND: CASE STUDY OF A MEDICAL EQUIPMENT COMPANY

• Rodrigo Ternero University of Santiago and Universidad de las Américas https://orcid.org/0000-0002-6075-6657
• Juan Pedro Sepulveda-Rojas University of Santiago https://orcid.org/0000-0002-6725-7295
• Miguel Alfaro University of Santiago https://orcid.org/0000-0002-1633-8853
• Guillermo Fuertes University of Santiago and Universidad Bernardo O’Higgins https://orcid.org/0000-0003-3044-5919
• Manuel Vargas University of Santiago https://orcid.org/0000-0003-4161-6621

DOI:

https://doi.org/10.7166/34-1-2668

Keywords:

Inventory management, ABC/XYZ model, Demand forecast, Periodic review

Abstract

This research proposes an inventory management system based on a periodic review model for a medical equipment company. The work aims to reduce inventory volume and out-of-stock and to improve service levels. The proposed methodology is a combined ABC/XYZ classification using the patterns and magnitude of demand under the constraints of spare parts cost. For the ABC/XYZ classification, we propose a model to forecast demand; and we evaluate eight forecasting methods to adjust the classification characteristics. The results obtained allow the reduction of arrears, an increased service level, and a decrease in average inventory.