The Development of Material Ordering Plan in a Case study Hard Disk Drive Manufacturing

Abstract

The objectives of this research are to develop the material ordering plan in which the material requirements can be varied between different lead times, and to reduce the ordering cost and to minimise the material inventories in hard disk drive manufacturing. Initially, the analysis is performed by using the Activity Based Costing classification methodology (ABC) to determine the level of significance for each type of material. In this study, the materials classes A of 49 types with 80% monetary values of overall costs are chosen. The Wagner-Whiten Algorithm (WW) is applied to determine the quantity of ordering at each lead time that can minimise overall ordering and inventories cost. The ordering plan is developed in consistence with the material requirement and shipment lead time for each type of material, which lead time varies material to material. The results have indicated that the developed ordering plan can reduce the ordering cost and inventory storage cost 1,806,881.98 baht or is the equal to 13.15% per quarter.