Investigation about Inventory Management Model for Raw Materials in Steel Industry

Abstract

With the continuous development of the economy, the steel industry, as one of the important components of the national economy faces lots of challenges. Effective inventory management for firms can not only achieve the optimal state of inventory cost benefit but also improve the efficiency of capital use, which can also improve the efficiency of the firm’s operational management. It is of great significance to enhance the market competitiveness of enterprises. This article examines raw material inventory management in steel companies. As the world's second-largest steel producer, Japan's high dependence on imported raw materials makes it a typical example of how Japanese steel companies manage their inventory levels. This paper focuses on Kosuke Kawakami's model of a non-flush gamma process for Nippon Steel Corporation, which has been effective in reducing inventory levels in practice. The paper then suggests ways of optimizing the model in light of new research in inventory management in recent years.