Abstract

The aim of this article. The paper provides an inventory management model for industrial enterprises under conditions of expected increase of energy prices. Different approaches to the formation of reserves will allow industrial enterprises to be aware of the risks of energy prices increase and, depending on the choice of a particular strategy of stockpiling of raw materials or components, to calculate the size and timing of deliveries while minimizing costs for shipping and storing. The results of the analysis. In terms of expected increase of energy prices industrial enterprises can make reserve stocks of raw materials for further production for lower prices than competitors. In this case, the company can supply raw materials according to three strategies: simultaneous delivery, even delivery, and firstly by smaller and then larger batches. For each of these strategies it was got: an optimal size of delivery, number of delivery periods, and the length of each period. Different approaches to formation of reserves will allow industrial enterprises to take into account risks of increased cost of energy and with the choice of a certain strategy of raw stockpiling to calculate the size of supply and delivery terms to minimize the cost of delivery and storage. Conclusions and perspectives for further research. The practical approbation of theoretical results obtained on actual data is important in further studies. The main objective of approbation is to determine the situations according to which one of the three proposed in the study strategies is chosen: a simultaneous delivery, even delivery and delivery firstly by smaller then by larger batches. In further studies it is also important  to determine the other risks that arise with increasing energy prices. Among them can be defined such as reduced demand for products of the enterprise, inability to fulfill contractual obligations, increased competition in the market.

Keywords: industrial enterprises, inventory management, energy prices, price increase, risk of increased cost of raw materials

JEL Classification: D20, D29, D51.

Cite as: Yashkina O. & Pedko, I. (2016). Models of inventory management for industrial enterprises under energy resources price increase. Marketing and Management of Innovations, 4, 315-324. https://doi.org/10.21272/mmi.2016.4-26

This work is licensed under a Creative Commons Attribution 4.0 International License

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