• José Angel López-Garces Graduate Student
  • Abraham Mendoza Associate Professor
  • Javier Masini-Aguilera Associate Professor




Inventory Management, Forecasting Methods.


Many organizations base their demand forecasts and replenishment polices only on judgmental or qualitative approaches. This paper presents an application where quantitative demand forecasting methods and classic inventory models are used to achieve a significant inventory cost reduction and improved customer service levels at a company located in Guadalajara, Mexico. The company currently uses a naive method to forecast demand. By proposing the use of Winters method, the forecast accuracy was improved by 41.12%. Additionally, as a result of an ABC analysis for the product under analysis, a particular component was chosen (it accounts for the 70.24% of the total sales and 60.06% of the total volume) and two inventory policies studied for that particular component. The first inventory policy considers the traditional EOQ model, whereas the second one uses a continuous-review (Q,R) policy. The best policy achieves a 43.69% total cost reduction, relative to the current inventory policy. This policy translates into several operational benefits for the company, e.g., improved customer demand planning, simplified production and procurement planning, lower level of uncertainty and a better service level.

Author Biographies

José Angel López-Garces, Graduate Student

José Ángel López  is currently pursuing graduate studies in Production Systems Optimization at Universidad Panamericana, where he has been working as a Research Assitant at the Department of Industrial Engineering since 2009. His research interests include Supply Chain Optimization and Simulation. He is a member of IIE and ISCEA.

Abraham Mendoza, Associate Professor

Abraham Mendoza received his M.S. and Ph.D. degrees in Industrial Engineering and Operations Research from the Pennsylvania State University in 2004 and 2007, respectively. Since 2008 he has been at Universidad Panamericana in Mexico where he is currently an Assistant Professor of Industrial Engineering. He belongs to the National System of Researchers sponsored by the Consejo Nacional de Ciencia y Tecnología (CONACyT). His research interests include supply chain logistics, operations management, transportation and facility layout/material handling. He is a member of IIE, ISCEA and INFORMS.

Javier Masini-Aguilera, Associate Professor

Javier Masini received his B.S. degree in Industrial Engineering from Universidad Panamericana and a Master of Engineering from Instituto Tecnológico de Estudios Superiores de Monterrey (ITESM). During 1999 and 2003, he received professional training on Lean Manufacturing, Statistical Quality Control and Quality Management in Japan. Since 1998 he has been at Universidad Panamericana where he is currently an Assistant Professor in the Department of Industrial Engineering. His research and teaching interests include lean manufacturing, process simulation, forecasting, value engineering and statistical process control. He is a member of IIE and SAVE International.



How to Cite

López-Garces, J. A., Mendoza, A., & Masini-Aguilera, J. (2013). A CLASSIC AND EFFECTIVE APPROACH TO INVENTORY MANAGEMENT. International Journal of Industrial Engineering: Theory, Applications and Practice, 20(5-6). https://doi.org/10.23055/ijietap.2013.20.5-6.460



Production Planning and Control