PROCUREMENT OF RAW MATERIALS FOR LIQUID ACRYLIC RESIN PRODUCTION USING FORECASTING METHODS AND MATERIAL REQUIREMENTS PLANNING

Abstract

This research aims to study the planning of placing orders for raw materials used in the production of liquid acrylic resin. The study uses the method of forecasting and material requirements planning (MRP), and begins with determining product demands though appropriate time series forecasting techniques. The results so obtained are then used for raw material order planning. It was found that for the products (D)-362 and (D)-836, the Holt-Winters exponential smoothing method should be used,  for the product (D)-500, the regression analysis should be employed, for the products (D)-376 and (D)-814, the moving average method is recommended, and for the product (D)-509, the exponential smoothing technique is suitable. Forecast results were used to define the product structure for MRP, and to identify optimal raw material ordering times, which resulted in completely eliminating loss sales due to stockouts, while increasing inventory holding costs only slightly. A three-month trial of the proposed method showed that stockout related opportunity costs dropped to 0 Baht, representing a 100% reduction, while inventory holding costs increased by 751,770 Baht, or 5%, compared to the previous three-month period. The trade-off between reduced opportunity costs and increased holding costs proved that addressing this research problem is worth the effort and cost efficient.