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ABC/XYZ Inventory Management Model in a Construction Material Warehouse

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  • Željko Stević
  • Bećirović Merima

Abstract

Accounting monitoring stocks of raw materials and supplies plays an important role in the business of every major company. Since inventories are one of the most expensive types of company assets, accounting for more than 50% of total invested capital, optimal inventory management should be an integral part of every company's business. In order to get complete results, this paper applies the ABC method, XYZ method, as well as the cross ABC XYZ method. The goal is to reduce costs of keeping the inventory as much as possible, while maintaining a level of service customers requires. The process of assortment planning, ordering and inventory management in the construction material warehouse is analyzed. The importance of monitoring inventory movements in order to achieve optimal amount of inventory, as well as the obtained results and guidelines for future operations is presented.

Suggested Citation

  • Željko Stević & Bećirović Merima, 2021. "ABC/XYZ Inventory Management Model in a Construction Material Warehouse," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 9(2), pages 325-334, December.
    • Handle: RePEc:anm:alpnmr:v:9:y:2021:i:2:p:325-334
    DOI: http://dx.doi.org/10.17093/alphanumeric.1052034
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    References listed on IDEAS

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    1. Liu, Jiapeng & Liao, Xiuwu & Zhao, Wenhong & Yang, Na, 2016. "A classification approach based on the outranking model for multiple criteria ABC analysis," Omega, Elsevier, vol. 61(C), pages 19-34.
    2. Ng, Wan Lung, 2007. "A simple classifier for multiple criteria ABC analysis," European Journal of Operational Research, Elsevier, vol. 177(1), pages 344-353, February.
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    More about this item

    Keywords

    ABC Analysis; Inventory Management; Warehouse; XYZ Analysis;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions

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