Implementation Of The Just In Time (JIT) Method To Efficiency Raw Material Supply Costs

Abstract

Inventory control is carried out to obtain savings in inventory costs by keeping the inventory level at an optimal level. One way to reduce inventory levels is to use the Just In Time (JIT) method. The Just In Time (JIT) method reduces inventory levels so asto reduce costs as efficiently as possible based on the fact that Just In Time (JIT) lowers the shipping lot, as a means of applying Just In Time (JIT) within the scope of a large Economic Order Quantity (EOQ) Lot. Based on this research, it can be seen that with the same data but using the Just In Time (JIT) method, the cost of raw material inventory issued is smaller than the costs incurred previously. The total inventory cost incurred before using the method is IDR 32,359,000.00 with the frequency of ordering each raw material 24 times in one period. Meanwhile, with the Economic Order Quantity (EOQ) method, the costs incurred amounted to IDR 17,767,620.00 with the frequency of ordering soybean and palm sugar raw materials 13 times and 20 times in one period. Using the Just In Time (JIT) method costs Rp8,883,810.00 with a frequency of ordering each raw material 4 times in one period. Based on the results of these calculations, the Just In Time (JIT) method costs more efficient inventory.