Abstract

Inventory is one of the main components in supply chain. However, it is not easy to design inventory policy under uncertainties. The frequent occurrence of overstocks increases the company's financial expenditure. Otherwise, stockout decreases customer satisfaction and damage the company's image. This study aims to provide monte carlo model to design inventory policy with the aim of maximizing net income with a variety of uncertainties, one of the uncertainties is defective product because of the travel from suppliers. To handle the complexity and uncertainty of problem, a Monte Carlo simulation is used with spreadsheet-based representation. To test the reliability of the model, guitar company is used as relevant use case with uncertainty adhered ‘the greater number of order quantity, the greater likely the defective guitar will be’. The verification & validation process, experimental design, and alternative selection are also done with statistical tests. Based on the simulation result, it is known that changing the reorder point to 80 and the order quantity to 90 gives the best result which can increase net income by 0.44% compared to the initial net income. In addition, the number of stockouts has decreased.

Highlights

  • Guitar is one of the most popular musical instruments compared to other musical instruments [1]

  • There are several data taken in this study, namely reorder point, order quantity, warehouse capacity, and inventory cost which is obtained through interview with head section of inventory department who know the conditions of inventory and warehouse in ZackGuitar

  • Probability distributions are based on company historical data in the form of Demand showed in Table 1, Lead Time showed in Table 2 and Number of defective products arising from shipping goods of supplier for 60 guitars ordered in Table 3, Number of defective products for 80 guitars ordered showed in Table 4 and Number of defective products for 90 guitars ordered showed in Frequency Probability Cumulative Probability

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Summary

Introduction

Guitar is one of the most popular musical instruments compared to other musical instruments [1]. This is because the price is not too expensive and the convenience to carry everywhere. Acoustic guitars are often used to accompany singers, or even to play solo instrumentals. ZackGuitar is one of the companies that sell acoustic guitar in Indonesia. ZackGuitar did not produce his own acoustic guitar, but was obtained from a ZikiZiba supplier from Taiwan. ZikiZiba has been trusted that the acoustic guitar supplied have excellent quality seen from the guitar model and the sound quality produced by the guitar

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