Managing Inventory in Maintenance Department of Building Services Company with ABC Analysis and Monte Carlo Simulation

Abstract

Inventory management is crucial in ensuring the right products are in the right location at the right time. This requires visibility into inventory, including knowing when to place orders, determining optimal order quantities, and identifying suitable storage locations. This work focuses on managing inventory of spare parts for maintenance in a two-tower office building covering electrical and plumbing activities. Through ABC analysis the spare parts where clustered according to total annual price, respectively. Then, Pareto chart is used to assemble the most important items grouped in A. Then, Monte Carlo simulation is applied to predict the demand and controlling the inventory for the topmost item for both, electrical and plumbing items based on historical data from year 2022 and 2023. The result shows that there are five electrical and six plumbing items categorized as items A. The topmost electrical item is LED tube T8 18W 6500K 4FT and angle valve is the top item for plumbing. Through Monte Carlo simulation, it was predicted that 51 LED tubes and 7 angle valves will be needed every month in year 2024. A dashboard using Google Data Studio was created to visualize the predicted and actual inventories for any decision.