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Inventory Management Modeling in the Budget Process of an Industrial Enterprise
Drobchak M. O., Yakovenko O. H.

Drobchak, Mykyta O., and Yakovenko, Oleksandr H. (2022) “Inventory Management Modeling in the Budget Process of an Industrial Enterprise.” Business Inform 1:152–158.
https://doi.org/10.32983/2222-4459-2022-1-152-158

Section: Economic and Mathematical Modeling

UDC 330.4

Abstract:
The article is aimed at studying and substantiating the role of stocks in the budget process of an industrial enterprise, as well as elaborating a dynamic economic and mathematical model of inventory management, which would take into account the stochastic nature of demand for products and maximize profits that directly depend on the volume of output and, accordingly, on the stocks of finished products and raw materials available in stock. Since stocks affect profits, which, in turn, reflect a positive financial result of the enterprise, the application of the elaborated model will be the key to more effective activities of the economic entity as a whole. In addition, the use of the elaborated model simplifies the process of developing the enterprise’s budgets. The article proposes a perspective method for solving the problem of inventory management of an industrial enterprise in the budget process, taking into account the stochastic nature of demand. The simulation model of order formation and dynamic model of inventory management are elaborated, which allows to determine for each individual period the optimal production volumes that contribute to maximizing the total profit of the enterprise. The connection of stocks and budget is determined and the role of stocks in the budget process is established, as well as the need for research in this area. The elaborated model was applied at an industrial enterprise, which confirmed its effectiveness. Calculations for two different strategies for the purchase of raw materials are made and the optimal volumes of monthly production are determined. The result obtained through the use of the described methods is analyzed. The elaborated model can be used in the planning and development of budgets at any enterprise engaged in production activities. The actual direction of further research is the development and automation of the budgets consolidation system.

Keywords: economic and mathematical modeling, budget process, simulation modeling, dynamic model, inventory management of the enterprise, profit maximization.

Fig.: 2. Tabl.: 2. Formulae: 23. Bibl.: 15.

Drobchak Mykyta O. – Student, Oles Honchar Dnipro National University (72 Nauky Ave., Dnіpro, 49010, Ukraine)
Email: [email protected]
Yakovenko Oleksandr H. – Doctor of Sciences (Engineering), Professor, Professor, Department of Economic Cybernetics, Oles Honchar Dnipro National University (72 Nauky Ave., Dnіpro, 49010, Ukraine)
Email: [email protected]

List of references in article

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