Ivey Publishing
Agarwal Automobiles: Fuel Station Forecasting and Inventory Management
Product Number:
9B17D016
Publication Date:
10/20/2017
Revised Date:
10/11/2017
Length:
5 pages (4 pages of text)
Product Type:
Case (Field)
Source:
Ivey
On June 1, 2016 a student was preparing for a summer job with Agarwal Automobiles, a vehicle fuel station owned by his father. The student had taken courses that covered supply chain management, including inventory management and forecasting. His father had suggested that, as a summer project, the student examine the fuel station’s retail inventory management practices with the intention of replacing the current simple rules with a more rational and complex planning model. The student needed some ideas to use as a guide toward a better ordering policy. The available data for the previous six months suggested that the company held an average ending inventory of ₹2.1 million worth of fuel products to maintain average daily sales of ₹0.52 million. The challenge was to reduce the inventory levels, while maintaining a high customer service level in fuel sales.
Learning Objective:
This case is suitable for a postgraduate level production and operations management course that discusses item level forecasting as well as the formulation of inventory management policies and models in a joint-product-ordering scenario. It can also be used in a graduate level quantitative technique or management science course to demonstrate the use of the mixed integer linear programming model for complex inventory planning problems, using a spreadsheet-based optimization tool like OpenSolver. The case provides opportunities to explore analytical techniques in a real business scenario. After completing the case, students should be able to do the following:
  • Perform quantitative business forecasting, including model selection and decomposition methods used in seasonality and trend analysis.
  • Manage the inventory of multiple products in a retail scenario, including economic order quantity and periodic review policy for joint ordering, under maximum order size and separation constraints.
  • Apply the mixed integer linear programming technique, using a spreadsheet-based solver to formulate and solve an inventory management problem dynamically by using the forecast data, under capacity and separation constraints.
Issues:
Disciplines:
Operations Management,  Entrepreneurship,  International
Industries:
Retail Trade
Setting:
India, Small, 2016
Intended Audience:
MBA/Postgraduate
Price:
$4.25 CAD / $4.25 USD Printed Copy
$3.75 CAD / $3.75 USD Permissions
$3.75 CAD / $3.75 USD Digital Download
Associated Materials
Supplements: 7B17D016 (0 KB)
You Might Also Like...

Save In: