Minimization of Inventory for Higher Production Using Response Surface Methodology

Abstract

Supply chain management is the handling of the entire production flow of a good or service — starting
from the raw components all the way to delivering the final product to the consumer. It depends hugely on
the management of demand, production and inventory. The more accurately these parameters are handled,
the more successfully the objectives of any business are achieved. A supply chain is considered efficient if
the cost can be minimized applying the very analytical tools of the supply chain itself. To minimize the
overall cost, minimizing the inventory cost has an impactful result. In this paper, we set the focal point at
minimizing the inventory of a renowned company based on the LPG industry in Bangladesh. Applying the
Response Surface Methodology (RSM) first the production error and forecast error have been found out.
The aim was to determine the most reliable forecasting method that would minimize the production error
and inventory error at the same time. At the end of our experiment, we could discover that Trend Analysis
perfectly fit the objective of this work.