An Artificial Neural Network Method for Managing Inventory of A Fertilizer Company in Bangladesh

Abstract

Business organizations are always facing uncertainties in demand, supply and inventories. For this, it is important for them to make the strategic plans to cope up with the uncertainty accordingly. To sustain, the business organizations must plan the future in such a way that the inventory cost, labor cost will be minimized and the utilization of time, financial resources and profit will be maximized. The optimum planning of resources also help the organizations to avoid wastage. A good forecasting technique can help the manager of a company to deal with the uncertainties. In this paper, we will work on such a planning fora fertilizer company in Bangladesh. To minimize the inventory cost, we will apply a new approach known as Artificial Neural Network (ANN), which is recently used for the problem of prediction and analyze the main characteristics of a system through an iterative training process. For this, we will first forecast the demand of fertilizer by using existing forecasting methods. We will then apply ANN for forecasting the demand of fertilizer of the company. We will also identify Economic Order Quantity (EOQ) to minimize total cost including inventory costs of the company. We use programming language MATLAB for analyzing different forecasting methods including ANN. Finally, we will use these results to find out the right forecasting technique for the fertilizer company with optimal inventory cost.

Dhaka Univ. J. Sci. 69(3): 133-142, 2022 (June)