Inventory modeling for spa business: a case study of phattaravadee zenity beauty and spa

Abstract

The objective of this research is to formulate the inventory model of massage oil (15 ml), which is the main
material and has been highly used in the company. The amount of raw material order depends on the estimation
of raw materials used by the owner. The overestimation of raw material consumption leads to increase ordering
costs, holding costs and taxes. From the study of raw material consumption in the past, it was found that the
usage rate of raw material was normal distribution. Therefore, the raw material model can be forecasted by Time
series forecasting model and Artificial neural network model. Then the best forecasting model has the minimum
of mean absolute deviation. The forecasting demand is applied to find the most economic order quantity, ordering
period and the appropriate ordering frequency. From this study, the results showed that the average Inventory of
raw material and the average total cost (ordering cost, holding cost and tax) during May to August 2011 was
reduced to 50.45 percent and 23.60 percent respectively.