Improvement of Inventory Allocation in a Manufacturing Company of Petrochemical Sector

Whenever a a company enters a new region, it is generally met with difficulties in planning the distribution of inventory, no matter its size and stability in its home market. These issues are only exacerbated if product flows increase over time. For a major player on the petrochemical market monitoring logistics costs is essential for competing against established vertically integrated companies. Therefore, the goal of this research is to analyze and suggest improvements to inventory allocation in the distribution network of a petrochemical manufacturer in Turkey. By analyzing the company’s historical data on inbound, outbound and stock levels, storage and handling capacities; applying ABC-XYZ, EOQ, DRP, forecasting methods and the Dupont model certain conclusions will be drawn. As a result of the analysis, a method for planning the distribution of product flows in different regions will be suggested and applied to forecasted product flows. The method will include the calculation of appropriate reorder points based on economic order sizes and safety stock levels for product groups and specific regions, required warehouse storage and handling capacities. Additionally, cost-savings calculations and an array of risks will be identified.