Optimization Technique to Minimize In-Process Inventory Costs in Multi-Stage Electric Cable Production Environment

• Author(s): Ezeaku I. I ; Nwadinobi C. P ; Nwachukwu U. C ; Nwakwuruibe V. C
• Paper ID: 1709461
• Page: 82-90
• Published Date: 03-07-2025
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 9 Issue 1 July-2025

Abstract

Manufacturing firms are involved in an organized formal effort to manage manufacturing resources as well as uncertain associated costs prevalent in their inventory control policies. This uncertainty is faced by multi-product manufacturing organizations in their in-process inventory cost decision making. Realizing the significance of this inherent uncertainty, the in-process inventory costs ( Ip) of a cable and wire industry located in the southern part of Nigeria where three products (Coaxial cable, Twin-axial cable and Core cable) are produced in multi-stage were investigated for a period of six months. The company’s analytical method which it has been adopting to reduce in-process inventory costs was first utilized. The obtained results indicate that the average in-process cost (Ip) and the total process cost (Tc) within the time under review were twenty-six million, seven hundred and two thousand naira (?26.72m) and thirty-five million, four hundred and two million naira (?35.42m) respectively. To optimize the in- process inventory cost and control policies of the manufacturing company, a mathematical model is derived in this research and solved using Lingo software (15.0 version). The optimal solution result indicated a cost reduction from twenty-six million, seven hundred and two thousand naira (?26.72m) to thirty-five million, four hundred and two million naira( ?23.85m) which accounts for 8% cost effectiveness for the firm. This has demonstrated the capability of the proposed model in handling in-process inventory cost optimization for similar companies.

Keywords

Multi-Product, In-Process Cost, Inventory Management, Control Policy, Cost Optimization

Citations

IRE Journals:
Ezeaku I. I , Nwadinobi C. P , Nwachukwu U. C , Nwakwuruibe V. C "Optimization Technique to Minimize In-Process Inventory Costs in Multi-Stage Electric Cable Production Environment" Iconic Research And Engineering Journals Volume 9 Issue 1 2025 Page 82-90

IEEE:
Ezeaku I. I , Nwadinobi C. P , Nwachukwu U. C , Nwakwuruibe V. C "Optimization Technique to Minimize In-Process Inventory Costs in Multi-Stage Electric Cable Production Environment" Iconic Research And Engineering Journals, 9(1)