Research on optimization of part stock

This paper puts forward a set of methods to reduce BSW company's part stock level to the minimum permitted subject to the condition of continuous production. By analysing the company's current part stocks in terms of the use of capital resources, it describes how to control the purchase parameters of imported parts. The imported parts are characteristic of long purchase lead times which fluctuate greatly, so the concept of a purchase risk time is proposed besides the concept of safety quantity against product predict errors. Based on the actual condition of the company, it gives a method to work out the economic order quantity of each import part. Furthermore, formulae are proposed to calculate purchase lead time and safety stock quantity, then examples are developed to illustrate them.