Thesis Archive
A system study on the production of Bitumen-Emulsions of KSES Corporation (2011)
Guia Krissa D. Catindig
Mikhail Vttorio F. Solano
Abstract:
-The study focused on the production system of KSEC Corporation Bitumen-Emulsions, for more than 85 years the company has been one of the leaders in bitumen products and services designed to address the emerging needs of the country. After assessing the plant’s present system, it turned out that the most established problem was that of the high ending inventory. This led to the group’s problem statement of: “The high ending inventory of Bitumen Emulsions of 203,033.41 kg has a deviation of 67.71% from the targeted ending inventory which incurs the company a holding cost of Php9,290,604.71 annually.”
Analysis of the causes of high ending inventory were presented and discussed in Chapter 5- Problem Analysis. It was identified that there was a holding cost amounting to Php9,290,604.71 which the company wants to limit to at least Php3,000,000. The demand forecasting technique used by the company proved to be inaccurate as when compared to time-series forecasting methods there was a deviation of 24% – 28% when mean squared error was utilized. Alternative solutions were created to deal with these unambiguous problems. For poor inventory management, application of good inventory management was proposed by the group. For the contamination and expiration of Emulsions, implementation of Maintenance Schedule was recommended. Meanwhile, for inaccurate forecast demand, three-month weighted moving average was proposed. Lastly, the group added another pitch, which is the Schenker offer. The recommendation provides lower holding cost which is what the company wants. Full implementation of the proposed solution is expected to reduce the holding cost. Moreover, a net present value of Php 89,326,100 was computed which shows that the alternative solutions are feasible.
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