An inventory model for the specialty chemical industry

Author

Paul Murchison, New Jersey Institute of Technology

Document Type

Thesis

Date of Award

5-31-1986

Degree Name

Master of Science in Management Engineering - (M.S.)

Department

Industrial and Management Engineering

First Advisor

Albert S. Viviani

Abstract

The specialty chemical industry is a unique segment of the chemical industry. This industry produces chemical intermediate products for the pharmaceutical, agricultural, cosmetics, and other chemically related industries. Most of the products that are produced are covered by patents or involve proprietary know—how. The specialty chemical products are a minor part of a total formulation but contribute unique properties to the end product. This feature of specialty chemicals gives the manufacturer unusual pricing power compared to producers of commodity chemicals. This industry has proven to be very competitive, profitable and in the forefront of the present automation revolution over the years.

This thesis develops an inventory model to address the inventory problem in the specialty chemical industry. These problems are high raw material, finished product and rework inventories. Due to production characteristics, the specialty chemical industry has limited storage space. Thus, a large inventory level is costly and unsafe. The rework inventory stored in drums usually presents the most immediate environmental and safety problems. If the drums leak or have to be disposed of, the specialty producer is faced with legal Occupational Safety and Health Act(OSHA), and political (community) problems and a costly disposal cost as well.

The inventory model is developed by considering thearitical factors affecting the various inventory levels in the specialty chemical industry. This model allows limitations to be set on these inventory levels by the user and to maintain a buffer inventory to satisfy the special production needs of this industry.

Recommended Citation

Murchison, Paul, "An inventory model for the specialty chemical industry" (1986). Theses. 3335.
https://digitalcommons.njit.edu/theses/3335