;Although there are mass demands in the field of commercial airplanes, the markets for the parts are consider oligopoly, low circulations, and the needs of products are generally from one single customer. Leading up to the demands in aerospace field relatively low compared with other fields, any requirement changes in orders will cause great impact. The specifications of raw materials, the qualifications of being a qualified suppliers and its fabrication/special processes adds up to high cost procurement. With long lead time on the raw materials, implementing safety stock is essential. Therefore, all these factors are reasons to why inventory costs are higher than sales revenue.
The material supply chain are not based on geographic locations. To successfully retrieve materials to the warehouse, the logistic arrangement goes through air, sea, or land. Especially here in Taiwan, an island surrounded by sea and with limited resource, all necessity have to be imported. With the inventory shipped through different ways, the shipping cost takes up a significant percentage in the total cost. Thus, procurement strategy and inventory management are major factors to a profitable product.
The objection of this thesis is to discussing ways of using procurement strategy and inventory management to overcome the challenges of risk of material shortage, high transportation cost (caused by the low demands), unstable order requirements, and long lead time of the aerospace industry. This study will analyze historical data to find reasonable periodic shipping pattern via sea and using air freight to cover emergency pull in/demands to fulfill the production demands. Theories will be applied to real life data to test the feasibility of the methods, and conclude with a system and/or strategy to overcome the material long lead time, unstable order specifications, high procurement cost, high transportation cost, and low demands of the aerospace industry.