Procurement and Inventory Optimization of a Frozen Durian Manufacturer

Authors

  • Thanapong Ruamsuke ภาควิชาเทคโนโลยีอุตสาหกรรมเกษตร คณะอุตสาหกรรมเกษตร มหาวิทยาลัยเกษตรศาสตร์
  • Pornthipa Ongkunarak ภาควิชาวิศวกรรมอุตสาหการ คณะวิศวกรรมศาสตร์ มหาวิทยาลัยเกษตรศาสตร์
  • Thaweephan Leingpibul Department of Marketing, Haworth College of Business, Western Michigan University, Kalamazoo, Michigan 49008, USA

Keywords:

Integer programming, Inventory Management, Procurement, Frozen durian

Abstract

The aim of this research is to propose a mathematical model for effectively managing the inventory of whole frozen durian as raw materials, with the objective of minimizing logistics costs and formulating the procurement and storage policies of the company. The research commences by investigating logistics processes and supply chains, with a specific focus on the areas of procurement and storage of raw materials, production, and transportation. To accomplish this, an integer programming is developed to solve the problem by optimizing the objective function of minimizing costs. The obtained results are analyzed using CPLEX Studio, and the model's performance is evaluated using historical data while assessing the sensitivity of various parameters. The findings reveal that the raw material expenses constitute a significant portion, accounting for 97.16% of the total costs. Consequently, the model establishes two distinct price ranges: raw materials will be procured for storage if the price falls below 81.50 baht per kilogram, whereas the range of 82-85 baht per kilogram will be considered for production purposes. Subsequently, the raw materials will be stored in external cold storage facilities, with priority given to the first and second facilities, respectively.

Author Biographies

Pornthipa Ongkunarak, ภาควิชาวิศวกรรมอุตสาหการ คณะวิศวกรรมศาสตร์ มหาวิทยาลัยเกษตรศาสตร์

Pornthipa Ongkunaruk was born in Bangkok, Thailand in 1975. She received the B.S. in Agro-Industrial Product Development from Kasetsart University in 1997, and M.S. in Industrial Engineering from Asian Institute of Technology in 1999.  She received a Ph.D. in Industrial and Systems Engineering at Virginia Polytechnic Institute and State University in 2005. Since 2005, she has been a lecturer in the Faculty of Agro-Industry, Kasetsart University, Bangkok, Thailand. Currently, she is an associate professor. Her teaching and research interests are Supply Chain and Logistics Management, Operations Research, and Simulation in Agro-Industry. She is the author of four books, 28 research articles, and 46 proceedings. She did more than 40 projects involving logistics and supply chain management, efficiency improvement, new product development, foresight, evaluation projects with governments and international organizations. Dr. Ongkunaruk was a recipient of the Royal Thai Government scholarship for her M.S. and Ph.D., received first-class honors in 1997, and James A. Linen III Memorial Prize for the most outstanding student in 1999.

Thaweephan Leingpibul, Department of Marketing, Haworth College of Business, Western Michigan University, Kalamazoo, Michigan 49008, USA

Thaweephan (Duke) Leigpibul was born in Bangkok, Thailand in 1971.  He received the B.S. in Food Science & Technology from Kasetsart University, Bangkok, Thailand in 1993. After working in a food manufacturing industry for a few years, he went back to school and completed his MBA in Computer Information System, Marketing, and Logistics from Missouri State University, Springfield, Missouri in 2000 and the Ph.D. degree in Marketing and Logistics from the University of Tennessee, Knoxville, TN, in 2005. From 2000 to 2005, he was a Teaching/ Research Assistant at the University of Tennessee, Knoxville in the Marketing & Logistics Department. Since 2005, he started his academic career as an Assistant Professor with the Marketing Department, Western Michigan University, Michigan, USA.   He has been involved in both Food & CPG Marketing program and Integrated Supply Management Program.   He is the author of more than 20 articles and presented at several conferences. His research interests include Logistics and Supply Chain Management, Food Physical Distribution, Food, and CPG Supply Chain, and International Business.

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Published

2024-06-25

Issue

Vol. 35 No. 113 (2022): January-June 2022

Section

งานวิจัย (Research papers)

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