Multi-criteria ABC, EOQ Method and PDCA for the reduction of warehouse costs in retail of household appliances

This article seeks to offer an improvement to the problems faced by the inventory management of retail companies in Peru by providing a solution to the main causes of inventory overstocking, since this retail sector is the fourth economically most important in the country's economy with 10.7% of GDP. Some popular inventory management techniques such as ABC and EOQ to reduce overstocking in warehouses have proven to be quite efficient in this sector; however, the addition of tools such as PDCA and demand forecasting will not only help to achieve a large reduction in overstocking but also to make it sustainable. This case of study was developed in an appliance retail store which had 25.89% overstock, 7% above average. The proposed solution model solves the four root causes that generate this problem. In addition, the combination of these techniques opens the way to new research topics and expands the literature on this subject. The results showed an 8.52% reduction in the overstocking rate.