INVENTORY CONTROL OF THREE TYPES OF BEAUTY SOAP

PRODUCTS: DOVE, OLAY, AND LIKAS PAPAYA

IN PRIME SUPERMART-GOA

SUBMITTED TO:
MR. JOSELITO DICHOSO TABARDILLO

PREPARED BY:
RICHELLE E. PASCOR
BSA-3A

SEPTEMBER 21, 2010

CHAPTER I
INTRODUCTION

This study dealt to Inventory control of beauty soap product:

dove,olay,and likas papaya

in Prime Supermart –Goa using Economic order quantity (EOQ) that

minimizes the total inventory holding costs and ordering costs. It is one of

the oldest classical production scheduling models. The framework used to

determine this order quantity is also known as Wilson EOQ Model or Wilson

Formula. The model was developed by F. W. Harris in 1913, but R. H. Wilson,

a consultant who applied it extensively, is given credit for his early in-depth

analysis of it. Economic order quantity (EOQ) applies to the Inventory control

of beauty soap product since the demand of the product is constant over the

year and that each new order is delivered in full when the inventory reaches

zero and there is a fixed cost charged for each order placed, regardless of

the number of units ordered, also the holding or storage cost for each unit

held in storage.

The goal of inventory control is to maintain a level of inputs and

finished products at the lowest cost possible. In real, inventory control is a

process itself, with the help of which, the demand of items, scheduling,

purchase receiving, inspection, storage and dispatch are arranged in such a

manner that at minimum cost and in minimum time, the goods can be

dispatched to production department. Inventory control makes use of

available capital in a most effective way and ensures adequate supply of

goods for production. Merchandising like Prime Supermart-Goa needs strong

management of all inventories for efficiency.

Inventory control of beauty soap product in Prime Supermart-Goa is

important in order to determine the optimal number of units of the product

to order so that we minimize the total cost associated with the purchase,

delivery and storage of the product, facilitate timely requisition processing

and also to improve financial control of the inventory by periodic

reconciliation of the inventory balances with the physical counts. The three

types of beauty soap product of Prime Supermart –Goa must be able to

satisfy the customers by being able to supply the desired merchandise when

required. In order to satisfy the customer and make a decent profit,

inventory analysis and control are very much desirable to Prime Supermart –

Goa.

This study has been prepared to assist management in the

understanding of inventory policy regarding the annual inventory and the

quantity to be ordered whenever the inventory level of the three types of

beauty soap products: dove, olay and likas papaya.

This paper describes a successful application of inventory control

model at a Prime Supermart located in San Jose St. Goa Camarines Sur and

assisted management in its decision to maintain and order sufficient quantity

of three types of beauty soap products: dove, olay and likas papaya

whenever the inventory level of this products drop. The basic assumptions
underlying Economic order quantity (EOQ)model are reviewed and dealt

with.

CHAPTER II

RESULTS AND FINDINGS

TABLE A. As shown in the table for Dove beauty soap product make

an order of 4221.37 or 4221 units whenever the inventory level drops to

36.36364 or 36 units. Base on the demand rate of Dove which is 1782 units

the study find out that among the three types of beauty soap product of

Prime Supermart-Goa,Dove is second to the most in demand beauty soap

products.

Parameter Value Parameter Value

Demand rate (D) 1782 Optimal order 4221.37

quantity

Setup cost (s) 10 Maximum Inventory 4221.37

level

Holding cost(H) .002 Average Inventory 2110.687

Unit cost 41 Orders per period .42

(year)

Days per year 363 Annual setup cost 4.22

(D/d)

Daily demand 4.909091 Annual holding cost 4.22

rate

Lead time (in 7 Unit cost 73062

 days)

Safety stock 2 Total cost 73070.45

Reorder point 36.36364

TABLE B. As shown in the table for Olay beauty soap product make

an order of 2304.34 or 2304 units whenever the inventory level drops to

12.23967 or 12 units. Base on the demand rate of Olay which is 531 units

the study find out that among the three types of beauty soap product of

Prime Supermart-Goa, Olay is not the most in demand beauty soap products.

Parameter Value Parameter Value

Demand rate (D) 521 Optimal order quantity 2304.34

Setup cost (s) 10 Maximum Inventory 2304.34

level

Holding cost(H) .002 Average Inventory 1152.172

Unit cost 42 Orders per period .23

(year)

Days per year 363 Annual setup cost 2.3

(D/d)

Daily demand 1.46281 Annual holding cost 2.3

rate

Lead time (in 7 Unit cost 22302

days)

Safety stock 2 Total cost 22306.21

 Reorder point 12.23967

TABLE C. As shown in the table for Likas Papaya beauty soap product

make an order of 4929.5 or 49 units whenever the inventory level drops to

48.8595 or 49 units. Base on the demand rate of Likas Papaya which is 2430

units the study find out that among the three types of beauty soap product

of Prime Supermart-Goa, Likas Papaya is the most in demand beauty soap

products.

Parameter Value Parameter Value

Demand rate (D) 2430 Optimal order 4929.5

quantity

Setup cost (s) 10 Maximum Inventory 4929.5

level

Holding cost(H) .002 Average Inventory 2464.751

Unit cost 33 Orders per period .49

(year)

Days per year 363 Annual setup cost 4.93

(D/d)

Daily demand 6.694215 Annual holding cost 4.93

rate

Lead time (in 7 Unit cost 80190

days)

Safety stock 2 Total cost 80199.86

Reorder point 48.8595

 CHAPTER III
CONCLUSION AND RECOMMENDATION
Among the three types of beauty soap products of Prime Supermart-

Goa:Dove , Olay, and Likas Papaya is the most in demand beauty soap

product, it is therefore recommended that it must be order to the supplier in

time to avoid shortage of stocks.

Furthermore, the researcher recommends the application of the

findings of the study on the development of the inventory control of three

types of beauty soap products: Dove, Olay, and Likas Papaya of Prime

Supermart –Goa, inventory policy must be applied.