Measurement of Raw Material Inventory Performance at Halal Frozen Food Business

Abstract

Abstract Manufacturing companies often provide supplies of raw materials so that the production process runs smoothly. Initial observations on halal frozen food businesses that use chicken and shrimp as the main ingredients show that material procurement activities are carried out daily and materials are purchased more when prices on the market are down. The company’s historical data shows a shortage of chicken raw material supplies in April due to increased demand, while raw material supplies were insufficient, and raw material prices tended to be high. This research was conducted to measure the performance of raw material inventory at halal frozen food companies using the inventory turnover rate, inventory days of supply, and fill rate methods and to calculate the optimal amount of raw material inventory with EOQ, safety stock, and reorder point (ROP). The inventory turnover rate calculation for chicken raw materials shows the best value in June 2022 of 68.35, the results of the analysis of the best inventory turnover rate for shrimp raw materials in March 2022 are 68.79. The calculation of inventory days of supply for chicken raw materials shows the best value in December 2022 of 0.98 days, calculation of inventory days of supply for shrimp shows the best value in February 2023 of 0.91 days. The fill rate is 100%. The research results show that inventory performance in the halal frozen food business is good. To avoid raw material shortages in the future, companies can use the Economic Order Quantity guide in ordering raw materials.