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A Decision Support Tool (DST) for Inventory Management

A Decision Support Tool (DST) for Inventory Management

Okure Udo Obot, Uduak David George, Victoria Sunday Umana
Copyright: © 2019 |Volume: 11 |Issue: 2 |Pages: 21
ISSN: 1941-6296|EISSN: 1941-630X|EISBN13: 9781522565413|DOI: 10.4018/IJDSST.2019040103
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MLA

Obot, Okure Udo, et al. "A Decision Support Tool (DST) for Inventory Management." IJDSST vol.11, no.2 2019: pp.27-47. http://doi.org/10.4018/IJDSST.2019040103

APA

Obot, O. U., George, U. D., & Victoria Sunday Umana. (2019). A Decision Support Tool (DST) for Inventory Management. International Journal of Decision Support System Technology (IJDSST), 11(2), 27-47. http://doi.org/10.4018/IJDSST.2019040103

Chicago

Obot, Okure Udo, Uduak David George, and Victoria Sunday Umana. "A Decision Support Tool (DST) for Inventory Management," International Journal of Decision Support System Technology (IJDSST) 11, no.2: 27-47. http://doi.org/10.4018/IJDSST.2019040103

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Abstract

Loss of customer goodwill is one of the greatest losses a business organization can incur. One reason for such a loss is stock outage. In an attempt to solve this problem, an overstock could result. Overstock comes with an increase in the holding and carrying cost. It is an attempt to solve these twin problems that an economic order quantity (EOQ) model was developed. Information on fifteen items comprised of 10 non-seasonal and 5 seasonal items was collected from a supermarket in Ikot Ekpene town, Nigeria. The information includes the quantity of daily sales, the unit price, the lead time and the number of times an item is ordered in a month. Based on this information, a simple moving average and y-trend method of forecasting were used to forecast the sales quantity for the following month for the non-seasonal and seasonal items. The forecast value was used to compute the EOQ for each of the items. Different scenarios were created to simulate the fuzzy logic EOQ after which the result of the conventional method, EOQ method, and fuzzy EOQ methods were obtained and compared. It was revealed that if the EOQ method is adopted, savings of 43% of holding and carrying cost would be made. From the scenarios of a fuzzy EOQ, a savings of 35.65% was recorded. It was however observed that in a real-life situation, the savings on a fuzzy EOQ is likely to be higher than that of an EOQ considering the incessant public power outages and the increase in transportation fares due to the high cost of fuel and the bad state of roads in Nigeria. To this end, a Decision Support Tool (DST) was developed to help the supermarket manage its inventory based on daily predictions. The DST incorporates a filter engine to take care of some emotional and cognitive incidences within the environment.

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