An Application of Demand Pull to Verify the Improvement of Inventory Management - A Case Study on a Contact Lens Company

• Main Authors: Li, Chien-Hung, 李建宏
• Other Authors: Li, Rong-Kwei
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/qm3p5x

碩士 === 國立交通大學 === 管理學院工業工程與管理學程 === 105 === Since the contact lens industry has a high-margin characteristics and the overall size of the market is growing rapidly, in the vigorous global competition, manufacturers must increase revenues and reduce costs to survive and to strive. Hence, to develop best business strategies and management mechanism is the key issue. Selling the most products at the lowest costs brings highest profit. If yield rate for the product is stable, mass production can effectively reduce costs and quickly build products of high inventory levels. Low cost contributes to low prices , which increases the sell. Most consumers will succumb to the low prices. When production and sales go up, increase in production capacity comes along, accelerating cost reductions, and maintaining a high margin. Furthermore, high inventory levels can be made to shorten product time. While the cost is down, the demand is satisfied, the company's revenue increases, the financial statements, however, presents low inventory turnover ratio. Inventory occupies too much liquidity and results in financial slack, which symbolize deteriorated short-term solvency and profitability ability. This study makes a comparison between the pull-replenishment mechanism (Demand-Pull) in Theory of Constraints (TOC) and the current operation traditional inventory management. The study aims to examine whether TOC Demand-Pull can reduce overall inventory levels, in the absence of out of stock, to improve inventory turnover and the efficiency of capital flows. The study also probes into the possible and feasible resolutions if excessive production capacity, when there is the change in demand for the start via production management.