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5008121-2886430″We hereby declare that we have read this thesis and in ouropinion this thesis is suffcient in term of scope and quality for the
award of the degree of Master of Science (Engineering Business Management)”
Signature : ________________________________
Name of Supervisor I : AP. DR. KHAIRUR RIJAL JAMALUDIN
Date : 9 May 2018Signature : ________________________________
Name of Supervisor I : AP. DR. ASTUTY AMRIN
Date : 9 May 2018
Invistigate Inventory Management in Aref Contractor Company
Mohanad alsharif
A report submitted in partial fulfilment of the
requirements for the award of the degree of
Master of Science (Engineering Business Management)
Razak School of UTM in Engineering and Advanced Technology
Universiti Teknologi Malaysia
May 2018
DECLARATIONI declare that this report entitled “title of the report” is the result of my own research except as cited in the references. The report has not been accepted for any degree and is not concurrently submitted in candidature of any other degree.

Signature : …………………………………………….

Name : Mohanad Alsharif
Date :
10 May 2018

DEDICATIONThis report is dedicated to my father, who taught me that the best kind of knowledge to have is that which is learned for its own sake. It is also dedicated to my mother, who taught me that even the largest task can be accomplished if it is done one step at a time.

ACKNOWLEDGEMENTIn preparing this report, I was in contact with many people, researchers, academicians, and practitioners. They have contributed towards my understanding and thoughts. In particular, I wish to express my sincere appreciation to my main thesis supervisor, Professor Dr. Mohd Shariff Nabi Baksh, for encouragement, guidance, critics and friendship. I am also very thankful to my co-supervisor Professor Dr Awaluddin Mohd Shaharoun and Associate Professor Dr. Hishamuddin Jamaluddin for their guidance, advices and motivation. Without their continued support and interest, this thesis would not have been the same as presented here.

I am also indebted to Universiti Teknologi Malaysia (UTM) for funding my Ph.D study. Librarians at UTM, Cardiff University of Wales and the National University of Singapore also deserve special thanks for their assistance in supplying the relevant literatures.

My fellow postgraduate student should also be recognised for their support. My sincere appreciation also extends to all my colleagues and others who have provided assistance at various occasions. Their views and tips are useful indeed. Unfortunately, it is not possible to list all of them in this limited space. I am grateful to all my family members.

ABSTRACTThe purpose of this study is to investigate the application of genetic algorithm (GA) in modelling linear and non-linear dynamic systems and develop an alternative model structure selection algorithm based on GA. Orthogonal least square (OLS), a gradient descent method was used as the benchmark for the proposed algorithm. A model structure selection based on modified genetic algorithm (MGA) has been proposed in this study to reduce problems of premature convergence in simple GA (SGA). The effect of different combinations of MGA operators on the performance of the developed model was studied and the effectiveness and shortcomings of MGA were highlighted. Results were compared between SGA, MGA and benchmark OLS method. It was discovered that with similar number of dynamic terms, in most cases, MGA performs better than SGA in terms of exploring potential solution and outperformed the OLS algorithm in terms of selected number of terms and predictive accuracy. In addition, the use of local search with MGA for fine-tuning the algorithm was also proposed and investigated, named as memetic algorithm (MA). Simulation results demonstrated that in most cases, MA is able to produce an adequate and parsimonious model that can satisfy the model validation tests with significant advantages over OLS, SGA and MGA methods. Furthermore, the case studies on identification of multivariable systems based on real experiment t al data from two systems namely a turbo alternator and a continuous stirred tank reactor showed that the proposed algorithm could be used as an alternative to adequately identify adequate and parsimonious models for those systems.

ABSTRAKKajian ini dilakukan bertujuan mengkaji penggunaan algoritma genetik (GA)
dalam pemodelan sistem dinamik linear dan tak linear dan membangunkan kaedah alternatif bagi pcmilihan struktur model menggunakan GA. Algorithma kuasa dua terkecil ortogon (OLS), satu kaedah penurunan kecerunan digunakan sebagai bandingan bagi kaedah yang dicadangkan. Pcmilihan struktur model mengunakan kaedah algoritma genetik yang diubahsuai (MGA) dicadangkan dalam kajian ini bagi
mengurangkan masalah konvergens pramatang dalam algoritma genetik mudah (SGA). Kesan penggunaan gabungan operator MGA yang berbeza ke atas prestasi model yang terbentuk dikaji dan keberkesanan serta kekurangan MGA diu t arakan. Kajian simulasi dilakukan untuk membanding SGA, MGA dan OLS. Dengan meggunakan bilangan parametcr dinamik yang setara kajian ini mendapati, dalam kebanyakan kes, prestasi MGA adalah lebih baik daripada SGA dalam mencari penyelesaian yang berpotensi dan lebih berkebolehan daripada OLS dalam menentukan bilangan sebutan yang dipilih dan ketcpatan ramalan. Di samping itu, penggunaan carian tcmpatan dalam MGA untuk menambah baik algorithma tersebut dicadang dan dikaji, dinamai sebagai algoritma mcmetic (MA). Hasil simulasi menunjukkan, dalam kebanyakan kes, MA berkeupayaan menghasilkan model yang bersesuaian dan parsimoni dan mcmenuhi ujian pengsahihan model di samping mcmperolehi beberapa kelebihan dibandingkan dengan kaedah OLS, SGA dan MGA. Tambahan pula, kajian kes untuk sistcm berbilang pcmbolehubah menggunakan data eksperimental sebenar daripada dua sistem iaitu sistem pengulang-alik turbo dan reaktor teraduk berterusan menunjukkan algoritma ini boleh digunakan sebagai alternatif untuk mcmperolehi model termudah yang memadai bagi sistcm tersebut.

TABLE OF CONTENTSCHAPTER TITLE PAGE
TOC o “6-7” h z u “Heading 1,2,Heading 2,3,Heading 3,4,Heading 4,5,Heading 5,6,Title,1,References,1” DECLARATION PAGEREF _Toc511826887 h iiDEDICATION PAGEREF _Toc511826888 h iiiACKNOWLEDGEMENT PAGEREF _Toc511826889 h ivABSTRACT PAGEREF _Toc511826890 h vABSTRAK PAGEREF _Toc511826891 h viTABLE OF CONTENTS PAGEREF _Toc511826892 h viiLIST OF TABLES PAGEREF _Toc511826893 h ixLIST OF FIGURES PAGEREF _Toc511826894 h xLIST OF EQUATIONS PAGEREF _Toc511826895 h xiLIST OF ABBREVIATIONS PAGEREF _Toc511826896 h xiiLIST OF SYMBOLS PAGEREF _Toc511826897 h xiiiLIST OF APPENDICES PAGEREF _Toc511826898 h xiv1INTRODUCTION PAGEREF _Toc511826899 h 11.1Overview PAGEREF _Toc511826900 h 11.2Company XYZ Background PAGEREF _Toc511826901 h 21.3Problem Background PAGEREF _Toc511826902 h 21.4Problem Statement PAGEREF _Toc511826903 h 31.5Research Objectives and Research Questions PAGEREF _Toc511826904 h 31.6Scope of Research PAGEREF _Toc511826905 h 41.7Significant of the Study PAGEREF _Toc511826906 h 41.8Report Organization PAGEREF _Toc511826907 h 42LITERATURE REVIEW PAGEREF _Toc511826908 h 52.1Introduction PAGEREF _Toc511826909 h 52.2TVET PAGEREF _Toc511826910 h 62.3TVET Instructors PAGEREF _Toc511826911 h 62.44th IR PAGEREF _Toc511826912 h 62.5Competency PAGEREF _Toc511826913 h 62.6Readiness PAGEREF _Toc511826914 h 62.7Conceptual Framework PAGEREF _Toc511826915 h 62.8Summary PAGEREF _Toc511826916 h 63RESEARCH METHODOLOGY PAGEREF _Toc511826917 h 73.1Introduction PAGEREF _Toc511826918 h 73.2Research Design PAGEREF _Toc511826919 h 73.3Population and Samples PAGEREF _Toc511826920 h 83.4Research Instruments PAGEREF _Toc511826921 h 83.5Pilot Study PAGEREF _Toc511826922 h 83.6Data Analysis PAGEREF _Toc511826923 h 83.7Research Flowchart PAGEREF _Toc511826924 h 93.8Summary PAGEREF _Toc511826925 h 9REFERENCES PAGEREF _Toc511826926 h 10
LIST OF TABLESTABLE NO. TITLE PAGE
TOC h z c “Table” Table 1.1 :Your text begin here PAGEREF _Toc482482999 h 2Table 1.2 :Your text begin here PAGEREF _Toc482483000 h 2Table 2.1 :Your text begin here PAGEREF _Toc482483001 h 2Table 2.2 :Your text begin here Your text begin here Your text begin here Your text begin here PAGEREF _Toc482483002 h 2
LIST OF FIGURESFIGURE NO. TITLE PAGE
TOC h z c “Figure” Figure 1.1Your text begin here PAGEREF _Toc500498830 h 2Figure 1.2Your text begin here PAGEREF _Toc500498831 h 2Figure 2.1Your text begin here PAGEREF _Toc500498832 h 3Figure 2.2Your text begin here Your text begin here Your text begin here Your text begin here PAGEREF _Toc500498833 h 3

LIST OF EQUATIONSEQUATION NO. TITLE PAGE
TOC h z c “Equation” Equation 1.1First invalid equation PAGEREF _Toc500499424 h 2Equation 1.2Equation for thermal heat exchange PAGEREF _Toc500499425 h 2Equation 3.1My proposed equation PAGEREF _Toc500499426 h 5
LIST OF ABBREVIATIONS- – LIST OF APPENDICESAPPENDIX TITLE PAGE
A Your appendix text begins here X
B Your appendix text begins here X
C Your appendix text begins here X
*note: Insert the appendices manually. No automatic.

CHAPTER 1
4917440-734695INTRODUCTIONInventory managment is the artwork and science of attaining the set targets of deciding to buy the materials at the lowest viable costs, making sure sufficient go with the flow and making the mosteconomical use of such materials in order that the total cost of production is minimized through the creation of such an environment that would enable the humans make a contribution tothe success of the objectives with least quantity of such inputs as money, time, materialetc. On the different hand, inventory manipulate is the science primarily based art of making sure that enough inventory is held via an agency to meet economically both its internal and externaldemand commitments. There can be dangers in holding both too a good deal or too littleinventory, as such, inventory control is principally concerned with acquiring the correctbalance or compromise between these two extremes. It is therefore, the extent that should be held that administration is interested in.Inventory management
Organization’s stock is an important component and its management is imperative to the victory and cost lessening of the firm’s use. Appropriate warehousing of stock so that when products are requested, they are held at the stockroom for the least time conceivable minimizing holding cost of stock (Wild, T., 2017). Consequently, other operational costs may increment inventory management costs like through the balance of requesting costs, holding costs, security stock and stock outs (Palevich, 2011) and (Wisner, Tan and Leong ,2011). Once an organization realizes this, it can create online stock administration instrument to screen its stock data by breaking it down into bunches by relating the categories with its customers.
Beamon and Kotleba (2006) clarify that Re-order level (ROL) is basic for helpful organizations to attain ideal efficiency and be successful. They got to have two reorder levels one that’s normal whereas a second one that’s for emergency cases .This gives customer satisfaction.

Bachetti, Plebani, Saccani and Syntetos (2010) argue that inventory management got to be organized in a consistent way to encourage the organization knowledge of when to order and amount to order. financial order amount enables organizations plan their inventory replenishment on a timely basis such as month to month quarterly half yearly or yearly basis. as organizations attempt to move forward on the stock administration financial order amount eoq and re-order point rop are important tools organizations can use to guarantee that stock supply does not hit a stock out as clarified by (gonzalez and gonzalez ,2010 )
just-in-time (JIT) contributes significantly to an organizations positive execution and client satisfaction. a study attempted that in the us to analyze stock administration and was found out that organizations that kept as well much stock in their warehouse worked an wasteful supply chain whereas those that kept minimal stock in their warehouse were exceptionally effective lai and cheng 2009 it was found out that keeping direct stock is nice and it empowers an organization work negligible costs of holding and setup costs eliminate undesirable lead time and create products as per clients order. this enables an organization accomplish add up to quality control (TQC) as proficient and successful supply chain management are executed in a firms value chain kumar and suresh (2009) and datta (2007) guarantee an unceasing supply of raw materials to encourage continuous production.

security stock and stock outs (Palevich, 2012) and (Wisner, Tan and Leong 2011). Once an organization realizes this, it can create online stock administration instrument to screen its stock data by breaking it down into bunches by relating the categories with its customer
Aref Contractor Company BackgroundAref Controcter is one of the unique companies in Jeddah Saudi Arabia owned by Abdullah Aref Alsharif. It was founded in 2006. It offers the customer a variety of services such as a design for residential and public buildings, road design, road construction,and gardens. Aref Contracting has a large number of clients from Jeddah, Riyadh, Makkah, Dammam and Tabuk, and now wants to expand in Saudi Arabia. The success is a strong relationship with customers and the believe in customer satisfaction.

Aref Contractor Company nature
Aref Contractor Company is providing all materials, labor and equipment such as cars, tools, engineers and services required to build the project. The main contractor is the person who hires the workers to perform construction work.

Problem Background
Inventory management is important to both the contractor company and manufacturing company . The availability of goods and materials that have the right amount of finished products, components and / or raw materials is essential to the success of a business. For example, if a company that sells goods or services has insufficient inventory, sales may be lost when customers access another company to purchase available goods or services. The cost to the business can increase, because costs associated with overstocking may include, but are not limited to, maintenance, storage, depreciation, amortization, loss of assets, such as money, net interest income, and / or inventory impairment. In any case, over-inventory will allocate capital that can be used more effectively elsewhere. Manufacturing companies or contracting companies face many challenges. In this regard, a manufacturer may require a variety of manufacturing parts / components used in the manufacture of a good. Inventory of inadequate workforce from these components can result in production delays, delivery delays, and ultimately, low customer satisfaction. As with entrepreneurs, it is necessary to reconcile the need for available stocks with the cost of excessive stock(Henderson, M., Pytel, D., McCreary, P. and Cortes, G., Flowvision LLC, 2013).

Problem Statement
Any contracting company must manage its inventories effectively. Inventory management involves identifying inventory that must remain at hand at a given time, decisions regarding the purchase of raw materials in large quantities, the number of times physical orders are placed and the optimal time to submit a request. “Why do we always run out of stock?” A large number of contractors face the frustration and frustration of trying to maintain stable production processes at the same time, providing customers with appropriate services and maintaining investments in equities and equipment at reasonable levels. The fact that statements are made so often indicates the many conflicts of interest (Henderson, M., Pytel, D., McCreary, P. and Cortes, G., Flowvision LLC, 2013).

Research Objectives Aiming to improve the service , this paper studies on inventory situations throughout the contractor company and manufacturing . The findings of this research will be the input for improve the inventory managment to retain customers’ loyalty and trust, also to maintain the reputation of Aref Contractor Company
The research objectives (RO) can be further detailed as follows:
To determine the extent of inventory management techniques application in Aref Contractor.

To establish the challenges of inventory management implementation techniques in Aref Contractor.

To examine basic action models (such as EOQ), safty stocks also amount of work.

To find out how much the company loses by using quantitative volumes (EOQ).

To determine if there is a relationship between inventory level and production level and customer services.

Determine if there is a relationship between the inventory level and the profitability level of Aref Contracting Company.

Finally. Make recommendations for improvement
Research Questions
The research questions (RQ) for this study are:
Objective 1. What is the amount of economic order of the Aref Contracting Company ?
Objective 2. Does the company buy in the amount of the economic order?
Objective 3. What basic inventory models are most common for contractor companies and manufacturing companies?
Objective 4. What should be the size of the inventory?
5. Is there a link between inventory levels and profitability?
Scope of Research Inventory management is really a very broad area, but this study is limited to manufacturing companies and cotractor companies, with special reference to the Aref Contractor Company in Jeddah Saudi Arabia.

the Investigations in this project is to what extent the inventory managment have affected the profitability, efficiency e.t.c. Also, attempts are made to analyses any cost savings . Efforts are also made to relate the level of inventory to the level of production and sales. Finally, inventory costs are related to the levels of profit with the aid of basic statistical tools .

Significant of the StudyIt is important to consider the social and economic commitment to the growth of the country . So that all the ways that will improve the company’s growth ,it must be exploited, so the researcher’s hope is that this study isuseful for owner of Aref Contractor Company and others.

This research project would help the management of Aref Contractor Company, to identify the most influentia risk of inventory management and production. Furthermore, the study will also help the management of the company, to guide against losses .

Report OrganizationIn this course, three chapters will be covered that comprises introduction, literature review, and methodology.

CHAPTER 2
5022850-449390LITERATURE REVIEWIntroductionOf course, no one thought of an issue in the same way, but the profit of the companies depends on the good management , an issue that seems to be unanimous among the leaders of the company. This is what happened here, when we try to examine and examine the past and present work that deals with inventory management and the development of an economic quantity model suitable for contractor companies. The subject of inventory management has sparked much debate in public debates, workshops and symposia, at the local, national and international levels, between public institutions and policy makers, organizations and academics. Various efforts have been made through the management of new businesses through projects, incentives, etc. For the organization of workshops in the same field. A study of most scripts in inventory management has some common and interesting features. Many of these writings deal with most of the problems associated with inventory management; others still focus on the best inventory management model.

This literature review was largely based on journals, some ,owner interview and expert opinions on issues relevant to the objectives of this study. It is divided into the following items:
Inventory Management Techniques
Re-Order Level
Economic Order Quantity
Just-In-Time.

Vendor Managed Inventory
Inventory management
Inventory management could be a bargains with administration of settled and current resources. Moreover, it involves the management of day by day operational supplies and in our case. Stock is additionally a basic resource in any organization in spite of the fact that agreeing to Barnes (2008) stock is looked at as a risk beneath the just-in-time (JIT) control framework. He agrees with the way accountants treat stock as an resource to the organization. Within the explanation of money related position, stock shows up beneath the current resources of the organization in any case whether it’s for benefit or not for benefit organization. Stock plays a major role and its administration goes a long way in making a difference a firm to develop because it relates to its external customers as well as the inner clients (Gibson, 2013). Therefore, stock is basic within the operation of Aref Contractor Company since they may hold stock as finished products, work in progress or raw materials for advance preparing (Fellows and Rottger (2005) and Shapiro (2009)). Shapiro, (2009) also advises that stock plays a crucial part when it comes to demand 15 planning and as a result, the organization needs to be flexible in its management of its stock when it comes to occasional or regular inventories.

Directors cannot avoid inventory management since it shapes the basis of their in general performance through disposal of uncertainties in their management. For the boards and management of Aref Contractor Company to find out that they are performing over standards, inventory management metric measures should be over board so that they may keep up the management’s certainty (Shapiro, 2009). Subsequently, Just-in-time concept has been found to have a few outlandish hidden cost that increment the cost of doing business in a few cases such as little suppliers to expansive companies .
In any case, the management of stock is important because the firm will be keen to guarantee that its resources and stock are well managed and request estimating is improved to avoid spontaneous acquirement. Stock can double up as stock and resources respectively. Therefore, when an organization improves request estimating, it enables the minimization of operational costs as well as client satisfaction (Hines and Bruce, 2007). When this is often done, it enables an organization plan for the longer term consequently applying different factors that an organization can use for its objective achievement to be specific: request and supply, taken a toll and staff requirements.

HISTORICAL SKETCH OF INVENTORY PROBLEMS:
Although inventory problems are as old as history itself, it has only been since the turn ofthe century that any attempts has been made to employ analytical techniques in studying theseproblems. The initial impetus for the use of mathematical methods in inventory analysisseems to have been supplied by the concurrent growth of the manufacturing industries andthe various branches of engineering, – especially industrial engineering. The real need foranalysis was first recognized in industries that had a combination of production schedulingproblems and inventory problems i.e. in situations in which items were produced in lots – thecost of set up being fairly high – and then stored at a factory warehouse (Ardichvili, A., Cardozo, R. and Ray, S., 2003).

SPECIFICATION OF AN INVENTORY SYSTEM:
The inventory system is basically an input-output system. In order toarrive at the best inventory policy i.e. the best decision rules for when and how much to order, it is necessary to have a clear picture of the inventory system.

Figure STYLEREF 1 s 2.3An input-Output representation of an Inventory System.

PROBLEM OF INVENTORY MANAGEMENT:
The problem of inventory involves the formulation of decision rules that answer two important questions:
1. When to place an order (or configure it for production) to restoreinventory?
2. How much should you ask for (or produce) for each supply?
the decision-making rules should aim to meet the expected demand at a minimum or maximum cost of benefits. (Puche, J., Ponte, B., Costas, J., Pino, R. and De la Fuente, D., 2016).
In many situations, our assumptions about known quatity and zero or constant delay are not valid. Demand and delay are often variable quantities, so we know best only their probability distribution. If we assume that the question and the delay are random variables, the analysis of the inventory management problem will become very complex. It has been found, however, that reasonably good situations can be obtained for many practical inventory management problems by assuming that the delay is a known constant.

Inventory management techniques
Inventory management techniques are extremely critical for business operations because their success and cost decrease of the firm’s use require improved supply chain performance and information to the workers (Lambert, 2008). These procedures are basic and information in them is profoundly desirable in this way, managers and obtainment staff need to be able to apply the procedures for the advantage of the organization (Fellows and Rottger, 2005).

Wild (2002) suggests, proper warehousing of stock so that when products items are requested, they are kept at the warehouse for the least time possible minimizing holding cost of stock. Consequently, other operational costs may increase stock 17 management costs. The way an organization is able to maintain its costs at low levels the way better it is for the year end profits (Palevich, (2012), Wisner, Tan and Leong (2011)). Organizations purchase and sell their stock; Organizations purchase and sell their stock; there continuously arises balance at the end of the year which have to be be carried over to the next year. Once an organization realizes this, it can create online stock management tool to monitor its stock information by breaking it down into groups by connecting the categories with its clients. Since organizations works differently in numerous fields, the stock can be classifies by either seasons or financial year conclusion of your most critical clients thus, request forecasting got to be employed to have an proficient supply chain (Poiger, 2010).

Re-Order Level
As organization endeavor to achieve effectiveness, they should be able to understand their ReOrder Levels (ROL) which empowers them know when to order and when not to order. This may be accomplished through the use of quantitative strategies which require proper inventory management (Apte, 2010). Re-Order level is critical for Aref Contractor Company to attain optimal efficiency and be successful leading to high supply chain performance and client satisfaction, at that point they need to have two reorder levels one that’s normal whereas the other is an emergency one in case of disaster (Beamon and Kotleba, 2006).

Economic Order Quantity
Bachetti, Plebani, Saccani and Syntetos (2010) contends that inventory management got to be organized in a consistent way so that the organization can be able to know when to order and how much to order. This will only be accomplished through the Economic Order Amount (EOQ) computation. Economic order amount enables organization to plan their stock replenishment on a timely basis such as month to month, quarterly, half yearly or yearly basis. By so doing, it empowers firms to have minimal storage costs or zero within their warehouses since stock is coming in and going out instantly. In this way, this tends towards the just in time concept of supply chain management received by Toyota motor Organization in Japan which helps in having zero holding costs, (Schonberger, 2008). In this way, as organizations try to progress on the stock management, the Economic Order Amount (EOQ) and Re-order Point (ROP) are critical tools that organizations can use to guarantee that stock supply does not hit a stock out as explained by Gonzalez and Gonzalez (2010). Over time, organizations have been keeping up their stock in a haphazard way which has required a change within the way firms conduct their business. Stock outs have been experienced adversely leading to client dissatisfaction hence; firms are changing their approach to be able to stay important by employing Economic Order Amount (EOQ) and Re-order Point (ROP) for client satisfaction.

The derivation of the basic EOQ model (Quantity of economic order) is quite simple in a situation
Figure 2.5.2 : EOQ

Figure 2.5.2: EQO Equivalents

Just-in-time
Just-in-time (JIT) contributes incredibly to the positive performance of an organization thus; inventory management must be undertaken with most extreme keenness taking into account good obtainment hones. A study was undertaken between 1981 and 2000 within the US to analyze stock management and was found out that organizations that kept too much stock in their warehouse worked an wasteful supply chain, whereas those that kept very few stock in their warehouse were exceptionally productive (Lai and Cheng, 2009). Thus, it was found out that keeping direct stock is nice and it empowers an organization work minimal costs of holding costs as well as keep setup cost at bare minimum, kill unwanted lead time and produce goods as per clients order. Eventually, this empowers an organization accomplish total quality control (TQC) as efficient and successful supply chain management are employed inside a firm’s value chain (Datta, 2007).

Figer:2.5.3

Source: manufacturingtomorrow.com
Marginal Analysis
Marginal analysis is important for perishable good and it’ll be highly desirable for Aref Contractor Company because it makes a difference procurement officer know when to make the next order as well as recommend the optimal stock level. This can be critical because perishable good can cost an organization a lot of cash, (IAPWG, 2006). Moreover, simulation is also a procedure that Aref Contractor Company can use for their advantage so that they can be able to map the real orders and deliveries before it really happens. Thus, inventory batching will save total supply chain cost for the Aref Contractor Company by decreasing their transport cost.

Figer:2.5.4
Source: http://www2.harpercollege.edu/
2.5.5 Vendor Managed Inventory
Management of inventory decides the way an organization will pushed itself to tall performance efficiency. A few organizations have resulted to vendor managed inventory (VMI) systems which help the provider to monitor customer’s stock usage. Through this VMI system, clients will avoid stock outs since the suppliers will have already recharged their inventory. The key viewpoint here is communication which should be planned well from the starting of business relations between the supplier and the customer (Frahm, 2003). Vendor managed inventory saves an organization immense finance and time since the supplier will be able to monitor its customer’s stock levels and make a point of replenishing them. As the client and supplier connected, the communication channel has to be clear and quick so that they may avoid instances of stock outs. Where the client expects having an irregular order levels, they should notify the supplier so that they can adjust their production to cater for the demand. Moreover, we presently have Joint Managed Inventory (JMI) which is an progress level of vendor managed inventory (VMI). It looks for to integrate the supplier more firmly into the customer’s organization by using the point of sale (POS) which permits the supplier to see the real time data of its customer’s stock (Frahm, 2003).

2.6 Theoretical Recommendation
It is expected that the application of Economic Order Amount, Marginal Analysis, and Just-in-Time, will improve Aref Contractor Company performance. As the staff gets it the strengths of having these strategies, at that point the unnecessary costs caused will be avoided. Therefore, the strategies will progress performance within the following ways:
Table 2.6 : Theoretical Recommendation.

No Inventory Management Techniques
How Performance Improvement will be achieved
1 Economic Order Amount Ability to know how much and when to replenish stock
2 Marginal Analysis Decrease loss for stock that’s perishable within a short period of time by guaranteeing they are ordered at the correct time.

3 Just-in-Time Requesting stock when they are required thus reducing storage/holding costs
4 Vendor Managed Inventory
Improving on inventory management systems by engaging outsourced suppliers to management inventory observing and replenishment.

CHAPTER 3
RESEARCH METHODOLOGY
Introduction
It would have been best to conduct this research in all the manufacturing companies and contractors companies in Saudi Arabia in arrange to seek after excellence and at the same time achieve the most excellent possible result. However, such a huge amount of companies will pose a few issues. As a result of the attendant monetary, time and other limitations, the research has limited this investigation to only one contractor company in Saudi Arabia: Aref Contractor Company.

3.1 Method for Information collection and analysis
The information used for this investigation were collected from primary and secondary sources of information.

3.1.1 PRIMARY SOURCES
The information were collected from the works accountant, production manager, marketing manager, sale official and other people from the chosen company. It was facilitated through questions, perception and oral interview. These instruments and other means of information collection were found convenient for this study because they helped to induce the view of the literate members of the company . Secondly, in a investigate work of this nature, where information collected will be totally analyzed, the researcher considered it very shrewd to use more of questions in order to avoid gathering of information that will have very small or no pertinence to the subject matter beneath study. Also, considering the kind of respondent being tended to, it was found most attractive because it does not require expound reply. Most of the questions are basic “yes” or “no” type. However others are such that require the respondent to rate a statement into choices; such as “strongly agreed”, “undecided”, “disagree” etc. The survey, generally utilizes a printed format that efficiently indicates all the questions as well as the arrangement to which they are to be presented. All these steps were made for easier investigation of information and result.

3.1.2 SECONDARY SOURCES
The result of existing literatures on stock management helped in~measurablyi n directing the researcher during the study. Other secondary sources of information include:
1.Newspapers
2.Magazines and Periodicals
3.Reference books and Dictionaries
4.Course reading materials
5.Secondary information also exists within the company
6.Examination of the company’s yearly reports and journals.

3.2 Pilot survey
A pilot overview was carried out to eliminate all ambiguous questions from the study instrument used. The pilot study was similarly carried out since the level of understanding contrasts among the respondents. The sample for this pre-testing was drawn from the company reviewed. The pilot study empowered the researcher to test the respondents’ attitudes to the questions and terms used.

3.3 Sample techniques
For easier collection of information, only Aref Contractor Company was used as a case study, since all others might not be covered as a result of time and financial constraints. The observations and results got from the company were used to generalize and predict what is obtainable in all other contractor companies, particularly within the areas of their stock management.

PROCEDURE AND TECHNIQUES FOR DATA ANALYSIS:
Majority of the questions within the survey have relevance to the speculation and investigate questions raised earlier. Information from the different questions were categorized concurring to their pertinence to the confirmation of the theory of this research project and realization of the stated goals. The information were analyzed utilizing basic statistical (eg mean, chi-square, regression and correlation co-efficient) and mathematical methods. The economic order amount of the company was calculated after estimating a few figures, as a few of the required figures were not in existence within the company’s books.

However, from the available information, relationship between certain variables were determined and analyzed. The relationship that existed between variables have been tested within the speculation for validity and reliability. Information for writing survey were obtained from relevant books. Most quantitative information were drawn from the accounts office of the Aref Contractor Company.

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APPENDIX A