Sunday, August 28, 2011

A Common Problem In Inventory Management

A production control executive presented the method he setup to manage the inventory of a mounting tape. Actually, the method is simple and conventional, he prepare a stock card to record all the event of material issuing, the production supervisor is requested to check the stock card every shitf to ensure material replenishment order being triggered when the stock level is reaching minimum stock level.

There are few problem i encountered in such system;
1. The operators drawing the material is required to note down the event on the stock card. This is an additional task for the operators and it is a manual recording, there is potential for human error.

2. Production supervisor is required to verify the physical stock verses the stock card and trigger stock replenishment when ever necessary. Is this an additional task for the supervisors ?

3. The production control executive also highlighted the issue of double ordering due to communication breakdown of supervisor between shift.

These are the few problems the production control executive is facing, but i believe similar problem happen in others company, don't you think so ?

Ok, i will post my solution in the next post.

Friday, August 26, 2011

Residual Plot

Residual (e) is the delta of observed value of dependent variable (y) and the estimated value (Y).

e = Y - y

Theoretically, sum of ( e ) should be close to 0 if the resudual of a regression model is normally distributed.

An appropriate regression model should have a random and normally distributed residual. We can check this condition with Residual Plot.

Example of Residual Plot