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CHAPTER I
ABSTRACT:
1 INTRODUCTION
Automobiles are a complex product with several parts and elements made of
materials such as textiles, glass, plastic, electronics, rubber, steel, and other metals
that go through various manufacturing processes. To develop, Cychlo Auto Parts
and all small businesses, especially those in the auto parts industry, must evaluate
their workplaces.
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Inventory control is crucial for small businesses like Cychlo Auto Parts to
track down all records more quickly and easily. Cychlo Auto Parts keeps all of its
records using traditional inventories and logbooks, which requires them to work
more and take longer to complete. The issues Cychlo Auto Parts encounters
include precisely regulating the quantity of the products, identifying and
prioritizing supply that is in high demand, making purchases, comprehending the
background of their supplier, and interpreting sales statistics. Uncertainty in the
data can result in over- and understocking, which can result in extra expenses and
missed sales if it is not properly managed.
This study is designed to address the challenges and problems facing the
workers in the Cychlo Auto parts. With this in mind, there are questions that the
researchers would like to answer to guide them in this study such as:
● What are the primary issues and difficulties that the employees at
Cycho Auto Parts face in managing their inventory that need to be
addressed through root cause analysis?
● How can ABC analysis be used by Cychlo Auto Parts to mitigate the
risk and cost of having too much inventory on hand?
● How do the supply chain disturbances affect the stock management
system in Cychlo Auto Parts Supply.
● How is forecasting important in enhancing inventory management
practices of auto parts suppliers, and what are the barriers involved
in effective demand forecast?
● Does the Pareto Principle facilitate effectiveness and profitability
when applied in the inventory management systems at Cyclo’s Auto
Parts Supply Company?
● What are the vital digital technology software that Cychlo Auto Parts
Supply should include to boost its stock control system?
General Objectives
This research will address the lack of planning and inventory control
influence the management of Cychlo Auto Parts. This system will help manage
and improve functionality of spare parts management and may lead to increased
efficiency and effectiveness thereby enabling users to operate with greater
efficiency. Furthermore, the system has the capability to efficiently manage and
regulate inventory resources, facilitating the strategic allocation and optimal
utilization of these resources. The implementation of an inventory control system
has the potential to decrease the amount of space needed for storing inventory,
reduce the time required to manage inventory, and lower carrying costs.
Additionally, such a system can effectively handle variations in simulation
utilization. The implementation of a systematic inventory management approach
has the potential to yield significant time and cost savings, thereby enabling
workers to allocate their efforts towards value-added endeavors that contribute to
the enhancement of the company.
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Specific Objectives
c) To identify the many components of supplies that support Cychlo Auto Parts
sales
1.4 GAPS
The scope of this study will only be focused on Cychlo Auto Parts Supply
that is located in Guiguinto Bulacan. The researchers conducting this study will be
visiting the business where all available workers are present. This study will only
be conducted within August-December 2023. To conduct an analysis of the
manufacturing process and supply control of Cychlo Auto Parts in order to
identify potential gaps and provide a methodology for enhancing inventory
management. The use of an efficient inventory monitoring system may assist
Cychlo Auto Parts in maintaining an accurate track of their parts inventory,
enabling them to reliably determine the lead time required to procure necessary
components for car repairs and optimize the scheduling of service appointments.
This research has the potential to assist Cychlo Auto Parts in enhancing its
operational efficiency and augmenting its profitability by reducing the time spent
on parts retrieval and allocating more resources towards activities aimed at
company improvement. This research uses root cause and ABC analysis
methodologies to discover the fundamental factors contributing to inventory
difficulties. By doing so, operations may implement appropriate corrective
measures to enhance inventory management, minimize expenses, and boost
productivity. The efficacy of inventory management streamlining in the study may
be compromised if the implementation and adherence to the inventory structure
system are not executed with thoughtful consideration.
The study of the Inventory Management System (IMS) of the supply of auto
components can be quite advantageous to many groups and industries.
1) The information offered by this study will be of great use to car parts
supplier business owners. They gain insight into how effectively managing
inventory may reduce expenses, boost earnings, and simplify operations. It also
aids in making educated decisions that facilitate business growth and expansion,
minimizing surplus and shortages, and predictive forecasting.
2) By using the results of this study, the inventory management staff can
improve their knowledge and proficiency. They are able to comprehend how an
organized IMS may eliminate errors, lighten the workload, and improve the
effectiveness and efficiency of their work.
4) The study might also act as a springboard for researchers starting more
ambitious studies. It offers a base on which they can construct their investigation.
This enables them to learn more about the real-world applications of inventory
management in the car parts sector. For suggesting changes or coming up with
novel ideas, this insight can be crucial.
5) The study may also be useful to other parties involved in the supply chain,
including investors, suppliers, and even scholars or experts in the sector. Investors
may be reassured of the management's effectiveness, suppliers may receive
insights to help them comprehend and respond to the company's demands more
effectively, and students or researchers may utilize the study as a foundation for
future research or as career guidance. Investigating the importance of the IMS
study in auto parts thus has numerous advantages.
1.7 ASSUMPTIONS
1.8 HYPOTHESIS
CHAPTER II
2 RELATED LITERATURES
This part will discuss and concisely examine significant literature and
studies in connection to the research paper’s purpose. The purpose of this chapter
is to present persuasive evidence by synthesizing substantial research on the issue.
The conceptual foundation of the study is based on a review of the appropriate
literature and investigations.
In the study made by Pinçe, Turrini, and Meissner. (2021), their study
comes to the conclusion that because of the irregularity and uncertainty in the
demand pattern, intermittent demand forecasting for spare parts is a challenging
assignment. Since they can't reliably foresee erratic demand, conventional
forecasting techniques frequently fall short in this regard. Forecasting accuracy
could be considerably improved by implementing more sophisticated forecasting
models that make use of statistical and machine learning approaches. The use of
these models, however, may be hampered by a number of issues, including the
necessity for a significant amount of historical data and high computing costs. The
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study emphasizes the possibility of hybrid models that integrate the benefits of
diverse approaches as well as the growing significance of contextual data like
maintenance schedules and product life cycles. It is also recognized as a critical
area for future research and development to integrate demand forecasting with
inventory management and decision-making procedures.
The study conducted by Cisse, Xue, and Agyemang. (2022), their study
offers a thorough analysis of several stock management methods, classifications,
and rules for the National automobile chamber of commerce (N.A.C.C.) vehicle
parts manufacturing company. In their study using contemporary forecasting
models, such as artificial intelligence and machine learning techniques, they found
out that it can considerably increase the accuracy of predicting client demand.
These approaches have an advantage over traditional models since they are more
adaptable and can take into account changes in consumer purchasing patterns and
market developments. The study also supported the idea that improving and
maintaining operational efficiency requires appropriate stock management. It is
clear that strategic stocking of automotive components based on precise demand
estimates can lead to lower storage costs, fewer instances of stockouts and excess
inventory, and more customer satisfaction. According to their study, classification
findings, systematic categorization of vehicle parts can help with effective
resource allocation, stock management, and order prioritizing. In turn, this would
simplify the processes and cut down on wasteful stocking expenses.The study
emphasized how crucial it is to create firm, transparent policies to oversee
operations. The National automobile chamber of commerce (N.A.C.C.) vehicle
parts manufacturing organization have found the adoption of rules that support
forecasting accuracy, stock management effectiveness, and categorization
efficiency to be invaluable.
In the study conducted by Kaushik et al., (2019), the optimal policy curve
approach case study on inventory reduction they found that this strategy can be
particularly helpful in effectively managing inventory levels, cutting storage costs,
and limiting stockouts. The company in their study was able to maintain a better
balance of commodities thanks to the application of the optimal policy curve
technique. Inventory levels were kept low without sacrificing service levels,
which resulted in significant cost savings. Their study also found that a reasonable
tradeoff between holding costs and scarcity costs can be achieved with correct
implementation of this policy. The program demonstrated exceptional adaptability
to variations in demand patterns, assisting in continually maintaining ideal
inventory levels regardless of the state of the market. Their study came to a
conclusive conclusion with the suggestive finding that using the optimal policy
curve approach can significantly improve inventory management, resulting in
increased operational effectiveness and overall profitability. However, to
guarantee its long-term success, ongoing observation and adjustment are
necessary. Although useful, the strategy necessitates a well-thought-out
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In the research of Singh, and Verma. (2018), their study on supply chain
of inventory management illustrates how crucial it is to firms' overall success.
According to them, maintaining a balance between stock availability and stock
holding costs requires effective inventory management. It helps to manage the
flow of goods, optimize storage requirements, and ultimately increase customer
satisfaction. Therefore, inventory management is an essential part of supply chain
management and has a big impact on how profitable and sustainable a business is.
Businesses must constantly improve and implement efficient inventory
management techniques if they want to remain competitive.
In the research of Wang, Dang, and Nguyen, N. (2020), to the best of their
knowledge, the extent of the inventory problem under inquiry is filled in their
paper, which addresses certain important gaps. The fourfold contribution of their
paper. First, the Arena software is used to simulate some values of the backlog
quantity, average inventory amount, matching total cost of inventory holding, and
backlog penalty in order to increase statistical power for the response surface
analysis. Second, Minitab software analyzes the replicates of the inputs and
outputs from the Arena simulation to determine the best levels of the parameters
(such as order amount, reorder point, target stock, and inventory review policy) in
order to obtain the realistic values of answers. Third, the efficiency of the
suggested computational model is tested using actual data in a numerical example
of the top air compressor producers in Thailand. The managerial implications of
the model's findings provide a roadmap for decision-makers to choose the best
replenishment level in order to minimize the total cost (i.e., holding and penalty
cost) as much as possible. In order to support various replenishment levels, they
are compared in terms of monetary values. The solution obtained using the
heuristic approach can, in the end, be very different from those obtained using
optimization methodologies, but it is still a rapid and workable solution for the
decision-maker to handle their difficulties one at a time. Therefore, they
concluded that in deciding the appropriate levels of elements to enhance
warehouse performance, warehouse supervisors, managers, and policymakers may
find this study to be a useful reference.
In the study of Bhasin. (2020), the goal of this research was to manage
inventory so that maintenance teams may carry out criticality analysis on spare
parts, optimize reorder points, and periodically plan cycle counts. This has the
potential to save thousands annually in carrying costs and reduce the amount of
downtime experienced, hence enabling a preventative maintenance plan.
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In the research made by Chopra, and Meindl. (2019), the study covers
supply chain management, including inventory management. Inventory
management is important, and the book analyzes different methods to improve its
efficiency. Integrating inventory management with supply chain planning is also
stressed in the book. If the supply chain strategy promotes manufacturing cost
efficiency, an inventory management plan to decrease inventory costs is
necessary. The goal of inventory management discussion provides a thorough
foundation for understanding the different ways that might maximize inventory
management, making it relevant to the study issue.
inventory status specifications and track the movement of inventory items, sharing
inventory levels, and developing a replenishment procedure to guarantee
continuous ordering of necessary items.
The study conducted by Ramos et al., (2020), states that gaining profit
margins without changing resource allocation is possible with inventory control.
The creation of a conceptual technique for inventory problems, followed by a
spreadsheet model that includes a dynamic logic of rearrangement policy, is the
contribution of this publication. A superior alternative order policy can be created
for a single-step supply chain by statistically analysing the dynamic
rearrangement point, the static rearrangement point, and the results of the
spreadsheet-based strategy and the analytical approach technique. point of
rearrangement and current rules of order. It was assessed using a demand that was
chosen at random. In order to ensure a higher degree of service efficiency in a
single-step supply chain, the goal of this work is to establish the optimal order
policy with a low total inventory cost.
In the research of Atnafu, and Balda. (2018), the study presents empirical
support for a paradigm that identifies five main characteristics of inventory
management practices and explains the connection between inventory
management practices, competitive advantage, and organizational performance.
Their study arrived at the following conclusions based on the information
collected from respondents: All of the hypotheses were confirmed and show a
strong positive influence of inventory management practice on organizational
performance and competitive advantage of MSEs in the manufacturing sub-sector.
The results of thier study also suggest that there is an intermediary competitive
advantage between inventory management methods and organizational
performance.
In the study of (Kumar, 2022), this study came up to the conclusion that
the supply chain management of the automotive industry may be impacted by the
observation process and financial performance analysis. Information pertaining to
various financial execution pointers and the store network the executives marker
has been removed from all fundamental vehicle organizations. Financial study has
determined that, in the cases of Maruti Suzuki India Ltd., Hero MotoCorp Ltd.,
and Bajaj Auto Ltd., the correlation between financial factors and the inventory
turnover ratio, a measure of supply chain management, is statistically significant.
From the study made, the Regression analysis has produced various findings.
Mahindra & Mahindra Ltd.'s independent variables only account for 84.9 percent
of the change in the dependent variable, while Maruti Suzuki India's independent
variables account for 99.7 percent. Factors outside of Hero MotoCorp Ltd. are
responsible for the dependent variable's change. The change in the dependent
variable at Bajaj Auto Ltd. is brought on by variables outside the company.
Synthesis
The study provides challenge with regard to the auto parts business
industry,to improve stock inventory in order to develop knowledgeable choices
regarding product selection, pricing, production plans, and supply chain
management. Cisse, Xue, and Agyemang. In 2022, their work is a detailed
assessment on various stock management procedures and classification by NACC
vehicle parts manufacture company. Case Study: Optimal Policy Curve Approach
to Inventory Reduction by Kaushik et al., (2019) identified that this plan is
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CHAPTER III
3 METHODS
4
CONCEPTUAL FRAMEWORK
elucidate the conceptual framework that underlies this crucial aspect of the
business's operations. By identifying the fundamental elements and their
interconnections, this research seeks to shed light on the various factors that
influence the procurement process at Cychlo Auto Parts. The utilization of this
framework enables a comprehensive evaluation of current methodologies and the
recognition of possible domains requiring improved performance.
This study was conducted in Guiguinto Bulacan. The business owner and 8
workers, who work there for almost 6 months to a year, were personally
interviewed guided by the survey questionnaire at Cychlo Auto Parts Supply in
order to address the typical problems and challenges they face at present. The
researchers will able to assess the historical data such as purchase order and the
previous sales of the business.
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3.4 RESPONDENTS
Interview
In this study, the researchers used personal interviews as useful tools for
the researchers to utilize when conducting effective qualitative research since they
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allow them to explore and explain more information as well as gain a deeper
understanding of the common causes and effects of problems in the company.
Observation Data
In this study the researchers used data analysis software that are essential
for interpreting the data collected. Tools such as analyze Google sheets
application is used to analyze patterns, trends and correlations and generate
meaningful insights from the accumulated data that transform raw data into
understandable format providing insights for informed and real-time decisions.
SOURCES OF DATA
Primary Sources
The business owner and other key workers were interviewed as the
researchers' primary sources for the study of the inventory management system of
Cychlo Auto Parts Supply since they had a thorough awareness of the company's
procedures and difficulties. The data provided directly from the business's past
and present order purchase records will serve as the main sources for information
on supply orders and purchases. These records will illustrate the inflow of goods
into the inventory, including lead times and costs. Sales records, which may be
received directly from the company, are another important source for this study's
assessment of previous and present sales data. They also provide as a real-time
indicator of how stock is moving through the system.
Secondary Sources
Business reports will be used in this study as secondary sources of data
for the inventory management system of Cychlo Auto Parts Supply. These reports
frequently include useful information on normal inventory turnover rates and
usual management techniques within the auto parts supply business. Government
statistics are also one of the secondary sources of information for data from other
organizations or industries that can give context for the workforce and economic
issues influencing the auto parts supplier industry. As a secondary source of data,
other academic studies, published works, and dissertations on comparable topics
might offer theories, approaches, and information that can be used in the study.
inventory management processes at Cychlo Auto Parts. This can be achieved via
the implementation of the following strategies:
ABC Analysis
sales. The things referred to as "A" items are those that exhibit high velocity or
possess significant value. Cychlo Auto Parts can use inventory management
software to categorize products as A, B, or C, and then do more frequent counts
for the A items while conducting fewer regular counts for the B and C items.
Once the "inventory A" items have been identified, Cychlo Auto items may
proceed to define certain specifications to maintain a balanced inventory level.
Furthermore, Cychlo Auto items can conduct cycle counts, which are
rudimentary audits of a designated portion of the inventory, specifically focusing
on class-A things, on predetermined dates to guarantee precision. Through the use
of ABC analysis, Cychlo Auto items may effectively manage their inventory
stocks by prioritizing the most often utilized things. This strategic approach
enables the streamlining of procurement processes and ultimately enhances the
accuracy of predicted outcomes.
Pareto Analysis
The Pareto chart is a graphical tool used to identify the predominant factors
contributing to an anomaly or problem. Pareto charts are constructed based on the
Pareto principle, which postulates that 80% of the outputs may be ascribed to 20%
of the inputs.
● Cychlo Auto Parts might will use a Pareto chart as a means to identify the
key elements that are responsible for its inventory expenditures. Upon the
identification of the primary factors, Cychlo Auto Parts may focus its
efforts on reducing the associated expenses.
CHAPTER IV
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Based on the data we gathered on our survey, both 37.5 percent are 26-33 years
old and the other is 34-41 years old respondents, both of 12.5 percent are 42-48
years old and 18-25 years old and the rest is 0 percent respondents.
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Figure 4.3 How long have you been working in Cychlo Auto Parts Supply
Based on the data we gathered on our survey, 62.5 percent respondents are
working there almost 3-4 years ago, 37.5 percent have been working there almost
2 years ago, the rest 3-6 months and 1 year is 0 percent.
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Figure 4.6 The most error prone tasks involved in inventory management
Based on the data we gathered on our survey, According to the respondents the
error prone tasks involved in inventory management, first is the results in
incorrect inventory levels which lead to stockouts that has 100 percent, second is
the process of physically counting inventories to ensure its accuracy is known as
cycle counting that has 100 percents lastly the Miscommunication with suppliers,
such as incorrect orders or delayed shipments, 37. 5 percent is When the incorrect
item is picked or packed, it might result in customer dissatisfaction and refunds.
In this section, we will use the Holt-Winters model to forecast the monthly
sales of 12 auto parts based on historical data from January 2024 to August 2025. The
Holt-Winters model is a time series forecasting method that uses three exponential
smoothing components: level, trend, and seasonality. The model can capture the
variations and patterns in the data and produce accurate forecasts for future periods.
Summary Holt-Winters Model for the 1st four months of Air Filter:
The charts below show the forecasted demand for the 12 products of Cychlo
Auto Parts, based on the Holt-Winters method applied to the monthly sales data
from January 2020 to December 2023.
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The charts compare the actual and forecasted sales values, as well as the
mean absolute percentage error (MAPE) of the forecasts. The charts also indicate
the optimal values of the smoothing parameters alpha, beta, and gamma for each
product. The last point on each chart is the forecast for the next month (September
2023).
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MILP Model
The study in Chapter 4 aims to analyze the inventory management system of Cychlo
Auto Parts Supply, focusing on optimizing the procurement process to meet demand
efficiently. Utilizing the Holt-Winters forecasting model, the study forecasts monthly
sales and employs a MILP model to minimize the total cost of inventory
management, including ordering, holding, and packaging costs.
To formulate a MILP model for Cychlo Auto Parts, the following notation can be
used:
yit: binary variable indicating whether an order is placed for product i in period t
yit=1 if yes,yit=0 if no
s¿ =si ,t −1+ q¿ −d ¿ + b¿ , ∀ i, t
The MILP model was utilized on the inventory data for Cychlo Auto Parts and the
outcomes were as follows:
Month Co xt hi It Ft Min. C
25000
20000
15000
10000
5000
0
1 2 3 4 5 6 7 8 9 10 11 12
Moving Average
Here, we examine how the Moving Average model is used to analyze and
predict inventory trends at Cychlo Auto Parts. One popular time series forecasting
technique is the Moving Average model, which calculates the average of a series of
successive data points over a specified period of time. This model is good at
identifying underlying trends and reducing short-term oscillations.
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Model Implementation:
To deploy the Moving Average model to our inventory data, we computed the
moving average for a selected window size, which denotes the number of months
included in each average calculation. For our evaluation, we adopted a simple three-
month moving average. The formula for the moving average (MA) at each temporal
juncture (t) is articulated as:
1
M A t= ×(Sale s t−2 + Sale st −1+ Sale s t )
3
This equation averages the sales figures for the current month and the two
antecedent months. The moving average is then determined for each ensuing month
in the dataset, offering a smoothed portrayal of the inventory trend.
The Moving Average model was utilized on the inventory data for Cychlo
Auto Parts and the outcomes were as follows:
Jan 12000 -
Feb 20000 -
25000
20000
15000
10000
5000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
In summary, Cychlo Auto Parts can forecast and analyze inventory trends
with great accuracy by using the Moving Average model. The three-month moving
average strikes a harmony between adaptability to alterations and the attenuation of
short-term perturbations. Augmented analysis and juxtaposition with alternative
forecasting models can amplify the precision and dependability of future inventory
prognostications.
Exponential Smoothing
forecast value, being unable to capture seasonality or trend in the data, and being
sensitive to the choice of the smoothing parameter.
where:
The historical data of monthly sales of 12 auto parts from January 2024 to
August 2025 are given in the paper
The initial forecast for January 2024 is the average of the sales from January
2023 to December 2023. For example, for auto part 1, the initial forecast is:
12
1
F Jan= ∑ X i
12 i=1
1
F Jan= (12000+ 20000+15000+18000+16000+25000+ 22000+17000+21000+19000+ 23000+20000)
12
F Jan=19000
For February 2024, the forecast for each auto part is the weighted average of
the actual demand for January 2024 and the forecast for January 2024. For example,
for auto part 1, the forecast is:
F Feb=17600
Similarly, for the other months, the forecasts are calculated as follows:
F Mar=0.2× 20000+(1−0.2)×17600=18400
F Jun=0.2 ×16000+(1−0.2)×17776=17220.8
F Jul=0.2 ×25000+(1−0.2)×17220.8=19376.64
F Oct=0.2× 21000+(1−0.2)×18981.05=19784.84
The table of results for the whole year (Jan-Dec) is shown below:
The graph below shows the actual and forecasted sales for each month, using the
exponential smoothing method with a smoothing parameter of 0.2:
The forecasted sales follow the general pattern of the actual sales, but are
smoother and less responsive to fluctuations. The exponential smoothing method
gives more weight to the recent observations and less weight to the older ones, and
thus adapts to changes in the demand level over time. However, the method also
tends to lag behind the actual sales, especially when there are sudden peaks or drops
in the data. The method also does not capture any seasonality or trend in the data, and
assumes that the future sales will be similar to the recent past. Therefore, the
exponential smoothing method may not be the most accurate or reliable method for
forecasting the sales of auto parts, and may need to be combined with other methods
or adjusted with additional factors.
Cost Benefit
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The MSE is defined as the average of the squared differences between the
actual and predicted values. The MSE gives more weight to larger errors than smaller
ones, and thus penalizes outliers more severely. The MSE can be calculated as:
n
1
MSE= ∑ ¿¿
n t=1
The MAE is defined as the average of the absolute differences between the
actual and predicted values. The MAE gives equal weight to all errors, regardless of
their magnitude, and thus is less sensitive to outliers. The MAE can be calculated as:
n
1
MAE= ∑ ∣ X − ^X t ∣
n t =1 t
where Xt , ^
X t , and n are the same as above.
The MSE and MAE are useful indicators of the errors associated with the
forecasting models, and can be used to compare their performance. However, they do
not provide information about the benefits or costs of using the forecasts for decision
making. For this purpose, a cost-benefit analysis is conducted to assess the trade-off
between the accuracy and the value of the forecasts. The cost-benefit analysis
considers the following factors:
The inventory holding cost, which is the cost of storing the unsold auto parts
in the warehouse. This cost depends on the inventory level and the unit
holding cost per period.
The stockout cost, which is the cost of losing potential sales due to
insufficient inventory. This cost depends on the demand level and the unit
profit margin per sale.
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The ordering cost, which is the cost of placing and receiving orders from the
suppliers. This cost depends on the order quantity and the fixed ordering cost
per order.
The cost-benefit analysis aims to find the optimal order quantity that minimizes
the total cost of inventory management, while satisfying the expected demand. The
optimal order quantity is determined by using the forecasts generated by the different
models, and comparing the resulting total costs. The model that produces the lowest
total cost is considered the most beneficial for the decision making. The details of the
cost-benefit analysis are presented in the next section.
The following table shows the mean absolute error (MAE) and the mean squared
error (MSE) of each method. The MAE and MSE are common measures of
forecasting accuracy, where lower values indicate less error. The table also shows the
complexity and implementation cost of each method.
Based on the table, we can see that Holt-Winters has the lowest MAE and
MSE, followed by MILP Model, Exponential Smoothing, and Moving Average. This
means that Holt-Winters and MILP Model are more accurate than Exponential
Smoothing and Moving Average, but they are also more complex and costly to
implement. Therefore, the best forecasting method depends on the trade-off between
accuracy and cost that Cychlo Auto Parts is willing to accept. Therefore, the Holt-
Winters Model seems to offer the most precise forecasting due to its consideration of
level, trend, and seasonality. However, the MILP Model may provide the best cost
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The Isuzu auto parts sales are presented in a line cart, showcasing the units
sold for each part through a trend line. The chart highlights the oil filter as the most
sought-after part, ranking highest, with the clutch cover as the least popular, located
at the bottom. The cumulative percentage line helps to illustrate the percentage of
total sales attributable to each part. Based on the figure, it is clear that the top-
performing parts, namely the oil filter, battery, bearing, and fuel filter, account for
over 80% of total sales. Therefore, it is recommended that Cychlo Auto Parts
Supply focuses its marketing and sales efforts on these four parts to maximize
revenue. Conversely, the chart also indicates that the least popular parts, which
include the clutch disc, clutch cover, fan belt, and piston ring, account for less than
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10% of total sales. In light of this, it may be prudent for Cychlo Auto Parts Supply
to minimize its inventory or even discontinue these parts.
According to the figure, the top-selling spare parts for FUSO vehicles are
cylinder liners and batteries, which account for 20% and 18% of sales,
respectively. When combined, these two parts contribute to nearly 40% of total
sales. Other parts, such as bearings, oil filters, and fuel filters, each represent
approximately 8-9% of sales. The remaining parts make up a smaller percentage
of sales.
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The chart depicting Jeep parts sales, showcases various categories and their
corresponding cumulative sales percentages. The bars are arranged in descending
order, indicating the top-selling categories. The chart reveals that the four most
popular parts - Cylinder Liner, Piston, Oil Filter, and Bearing - contribute to over
70% of the total sales. This suggests that by prioritizing these four parts, Jeep can
significantly increase its overall sales. The remaining parts may still be
significant, but Jeep should focus on the top four initially to achieve the greatest
impact.
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The Pareto chart exhibits Toyota's total sales for each car part, arranged in
descending order of sales. The highest-selling part is located on the left, while the
lowest-selling part is on the right. The cumulative line chart depicts the percentage
of total sales that each part contributes. According to the figure, the battery is the
top-selling part, accounting for over 25% of total sales. Moreover, the piston, fuel
filter, and air filter are also popular, as each of them accounts for more than 15%
of total sales. The remaining parts, on the other hand, contribute less than 10% of
total sales. Toyota can utilize this line chart to prioritize its sales and marketing
efforts. For instance, the company should focus on selling more batteries, pistons,
fuel filters, and air filters since they make up a significant portion of total sales.
Additionally, Toyota may want to consider reducing the number of parts it offers,
as many of these parts contribute very little to total sales.
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The line chart is an invaluable tool for gaining insights into the distribution
of sales for Multicab vehicle parts. It illuminates the significant impact that a
select few parts have on overall sales performance, with Cylinder Liner, Bearing,
and Oil Filter comprising over 70% of total sales. These key parts are crucial
drivers of the company's profitability and should receive top priority in terms of
inventory management, supply chain optimization, and marketing efforts.
It's important to note that while the remaining parts may contribute less to
total sales, they should not be disregarded. The Clutch Disc, Fan Belt, and Oil
Seal, for example, collectively account for a sizeable 15% of sales. Although they
may not be as significant individually, their combined contribution is substantial.
Therefore, it's crucial to strike a balance between focusing on the major
contributors while ensuring that the other parts receive appropriate attention.
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Based on the data, it appears that the oil filter is currently the top-selling
automotive spare part, followed by the fuel filter and air filter. Conversely, the
piston ring and piston seal seem to be the least popular. Sales of all spare parts
have experienced a gradual increase over the past year, with a minor dip in July
2023. May 2023 saw the most significant boost in sales, with a 22% rise from the
previous month. Overall, the automotive spare parts market is steadily expanding,
likely due to several factors such as the growing number of vehicles on the road
and the increasing average age of cars, leading to more demand for repairs and
maintenance.
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350
300
250
200
150
100
50
0
ISUZU FUSO JEEPNEY MULTICAB TOYOTA
PISTON PISTON
BEARING BEARING
BATTERY BATTERY
The graph offers a clear representation of the sales figures for each part,
highlighting the parts that are in high demand and those that are not. The most
sought-after parts are the bearing, oil filter, fuel filter, oil seal, and fan belt, which
are crucial for the proper functioning of vehicles and machinery. The fan belt, in
particular, is relatively inexpensive and easy to replace, which could explain its
popularity. In contrast, parts such as pistons, cylinder liners, clutch covers, piston
rings, and clutch discs are less popular, suggesting that they are either less
essential or more expensive to replace. Furthermore, these parts may not require
frequent replacement, as they are less prone to wear and tear. Overall, this graph
provides valuable insights for businesses that sell these parts and for consumers
who wish to make informed purchasing decisions.
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Technological Institute of the Philippines
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Technological Institute of the Philippines
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The graph depicts the projected sales of various automotive parts for the
next two years. It shows a general uptick in sales for all items, except for piston
rings. The highest growth in sales is expected for air filters, followed by batteries,
bearings, and cylinder liners. There are several potential reasons behind this
predicted increase in sales, such as the global economy's recovery from the
COVID-19 pandemic and the rise in electric vehicle popularity, which may be
driving demand for specific parts like batteries and electric motors. Additionally,
the aging global vehicle fleet is likely to lead to a higher demand for replacement
parts. The forecast also indicates some differences in sales between items. For
instance, the sales of air filters are projected to increase by a greater percentage
than the sales of piston rings. This discrepancy may be due to air filters being
relatively inexpensive and easy to replace, while piston rings are more costly and
complicated. All in all, the forecast suggests that the automotive parts market will
experience growth in the coming years, driven by various factors such as the
increasing demand for new vehicles, the popularity of electric vehicles, and the
aging global vehicle fleet.
ABC Analyses
As per the ABC analysis of Toyota auto parts, the categorization of the
items provides insight into their value and contribution towards the revenue. The
A items, which include oil filter, battery, bearing, fuel filter, cylinder liner, oil
seal, and piston, are of significant value and play a crucial role in generating
revenue for the company. On the other hand, the B items, comprising clutch disc,
piston ring, and air filter, also have importance but to a lesser extent. Lastly, the
clutch cover and fan belt have the least contribution to the revenue generated by
the company.
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The A items for Fuso autoparts are batteries, clutch discs, cylinder liners, air
filters, clutch covers, bearings, and oil seals, play a critical role in driving the
revenue. The B items, including oil filters, pistons, and fuel filters, are also
significant, albeit to a lesser degree. Finally, the piston rings and fan belts make
the smallest contribution to the company's revenue.
For Jeepney autoparts, the A items are cylinder liners, batteries, pistons, oil
filters, bearings, piston rings, and fuel filters. The B items, including oil seals,
clutch discs, clutch covers, and air filters, also hold significant importance but to a
lesser degree. Lastly, fan belts contribute the least.
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APPENDICES
The tables represent the total quantity of items purchased on the company and
the forecasted monthly.
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Table 2. Battery
Table 3. Bearing
CHAPTER V
Conclusion:
Criteria
Speed and Integration and Maintenance
Alternatives Efficiency Compatibility and Support Security Scalability
Holt Winter 3 2 8 10 5
MILP 4 4 5 15 10
Moving Average 5 4 5 12 10
4.1. Calculate
(Σxij^2)^1/2
Criteria Speed and Integration and Maintenance
Alternatives Efficiency Compatibility and Support Security Scalability
Holt Winter 1 0.4 0.53 1.33 1.33
MILP 1.33 0.8 0.33 2 2.67
Moving Average 1.67 0.8 0.33 1.6 2.67
Σxij^2)^1/2 2 1.41 1.1 2.22 2.58
Alternatives Ci Remarks
Holt Winter 0.9605 Best
MILP 0.2291 3rd
Moving Average 0.0526 2nd
Step: 9 Conclusion
approach is likewise a viable choice, with an AMA of 0.9526. However, the Mixed
Integer Linear Programming (MILP) technique is less effective, with an AMA of
only 0.2291. The Holt-Winters approach is a sort of exponential smoothing that
considers both the trend and seasonality of the data. This makes it an excellent
choice for data containing both of these qualities. The moving average method is
simpler, using the average of the most recent data points. This can be an effective
method for data that is not trending or seasonal. The MILP approach is a more
advanced method for optimizing a set of constraints. This can be a suitable
alternative for data that is extremely complex or has a large number of variables. It is
vital to remember that the optimal algorithm will differ based on the data set. It is
usually a good idea to experiment with multiple solutions to find which one works
best for your specific problem.
Recommendation:
Real-time Tracking:
In order to track inventory levels, set up a real-time tracking system. This helps to
reduce stockouts, prevent overstocks, and improve overall inventory accuracy.
Integrate the IMS with other essential systems, such as sales, procurement, and
accounting. This ensures smooth communication among departments, reducing
manual data entry and errors.
Demand Forecasting:
Use demand forecasting techniques to predict future demand trends. This helps to
optimize stock levels and ensure that the right products are available at the right time.
Supplier Collaboration:
Security Measures:
Implement strong security measures to secure critical inventory data. This comprises
user access limits, data encryption, and periodic security assessments.
Mobile Accessibility:
Provide mobile access to the IMS, allowing employees to view real-time inventory
information from anywhere. This is especially beneficial for employees who need to
verify inventory levels on-the-go.
Include thorough reporting and analytics capabilities to gain insight into inventory
performance. Customizable reports can help you make more informed decisions
about restocking, pricing, and product promotions.
Scalability:
Make sure the IMS is scalable to meet future development. The system should be
able to handle an increasing number of products, transactions, and users while
maintaining acceptable performance.
Provide proper training and continuing assistance to staff utilizing the IMS. This aids
in increasing the system's efficiency and swiftly correcting any difficulties.
Keep the IMS software up to speed with regular upgrades that provide new features,
bug fixes, and increased security.
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Technological Institute of the Philippines
Research Compendium, 2023
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Research Compendium, 2023
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