Graduate Program

Technology

Degree Name

Master of Science (MS)

Semester of Degree Completion

2005

Thesis Director

Mahyar Izadi

Thesis Committee Member

Louis Butler

Thesis Committee Member

Samuel Guccione

Abstract

An inventory management system that does not ensure inventory record accuracy greatly reduces the ability of a company to control inventory levels and fulfill customer requirements. This study investigated how two principles of inventory management affected three business metrics: on-time delivery, inventory record accuracy, and inventory level management.

Eight manufacturers of aircraft parts and equipment in northeastern lllinois responded to a survey created to analyze the effects of ABC classification of inventory and cycle counting techniques on inventory management. Survey data were collected via teleconference with a representative of each manufacturer.

Half of the manufacturers reported using ABC inventory classification and/or cycle counting techniques for inventory accuracy. The most common ABC inventory classification system reported was both the dollar value and usage/movement methods. The random selection method was the most preferred method of cycle counting.

Not all companies had information about their on-time delivery ratings before implementing an inventory management technique. Responses were variable for those that did have this information. Two out of four manufacturers reported unchanged ontime delivery ratings after implementing an inventory management technique, while one reported a decrease and another reported an increase.

Inventory accuracy data also proved difficult to collect. Those companies providing inventory accuracy information, however, typically indicated dramatic increases in their accuracy ratings after the implementation of an inventory management technique.

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