A Cost-Effective Material Management System With Integrating Accurate and Efficient Forecasting, Purchasing, and Inventory control Subsystems For a Government-Owned Utility

• Main Author: Shih, Shan Hung
• Published: NSUWorks 1993
• Subjects: Computer Sciences
• Online Access: http://nsuworks.nova.edu/gscis_etd/834

Taiwan Power Company (Taipower) spends significant and unnecessary amounts of capital in distribution material inventory. As a government owned power utility, citizens expect to receive low cost electricity, so it is particularly important for Taipower to have a cost effective material management system (MMS). To reduce operating costs on carrying inventory, this dissertation explores literature on MMS in terms of forecasting demand, inventory control, and purchasing. And, this dissertation conducts extensive research on conventional operations research and modern computer-based material management techniques. In addition, four case studies are analyzed to determine what sort of MMS will be appropriate for Taipower's needs. The theory and practice revealed in the literature lead to a proposed MMS methodology, a hybrid of conventional and modern computer-based techniques, which can prevent the shortages and surpluses of material consuming needless amounts of capital. Finally, a simulation is offered to compare the costs of the existing and proposed material management system. The simulation results indicated that Taipower could reduce its average inventory level by 64.5% and its operating cost by 44 . 7% with the proposed material management system.