Total Inventory Cost Research Articles

Optimizing a Multi Period Deterministic Inventory Routing Problem in Agriculture Industries

This paper develops a solving model for multi-period deterministic inventory routing problem (MP-DIRP) in supply chain focus on agriculture industries. The issue is how to improve the perishable product delivery process from a distribution centre (DC) to a collection of customers over a planning horizon. This paper proposed a model to achieve optimization in terms of costs respectively. The transportation problem is solved by using a simulation technique and developed using an algebraic modelling language which is known as a mathematical programming language (AMPL) to find an optimal solution within the period. The route for a distribution centre (DC) is set up by a supplier depending on the number of products assigned to each customer, which contributes to determining the best inventory routing problem (IRP) for each period. As a result, by applying the transportation model developed in this study, it is expected that the industries can achieve optimization by minimizing their total inventory and transportation costs.

Perancangan Sistem Informasi Persediaan Stok Barang Dan Penjualan Pada Toko Raja Sosis Menggunakan Bahasa Pemrograman PHP Dan Database MySQL

E-commerce as a means of selling frozen food at the King Sausage shop, because it is considered to save time and energy so it is more effective and efficient, there is no need to queue and just wait for the goods ordered to arrive at the buyer's place without having to leave the house just by using connection and internet and assist employees in processing sales transactions. uses the EOQ (Economic Order Quantity) method to determine the economic quantity for each order so as to minimize the total cost of inventory at the sausage king shop. It is hoped that the information system for stock inventory and sales at the King Sausage shop will provide maintenance and development for this system so that it can be used sustainably as long as it is needed.

Analisis Efisiensi Biaya Persediaan Bahan Baku Menggunakan Metode Economic Order Quantity: Studi Kasus di UMKM Silvy Collection

Raw material inventory is crucial for companies as it relates to the amount of stock and frequency of orders. Silvy Collection SME is an industry engaged in the production of hijabs. This SME faces challenges with the stock of raw materials like fabric, thread, and foam, which often result in surplus or excess. This research aims to optimize the cost of purchasing raw materials such as fabric, thread, and foam in this SME through forecasting for the next 12 periods or one year. Forecasting is conducted using the Time Series method, followed by Economic Order Quantity (EOQ) calculations for the period from September 2022 to August 2023. The results indicate a need for 10 rolls of fabric, 49 rolls of thread, and 3 rolls of foam. The total raw material inventory cost according to the company's policy amounts to IDR 1,282,436,960, while using the EOQ method it is IDR 1,278,175,153. The expenditure incurred by Silvy Collection SME is IDR 450,821,525, whereas using the EOQ method it is IDR 450,738,704. The total raw material inventory cost calculated using the EOQ method can save IDR 82,821 or 0.02% compared to the company's policy.

Penentuan Order Quantity Bahan Baku Pupuk Bersubsidi Jenis Npk Menggunakan Metode EOQ Di Pt. XYZ

Fertilizer has an important role in supporting the productivity of food crops. The Indonesian government provides subsidized fertilizers in an effort to support the fulfillment of national food needs. The number of subsidized fertilizer needs targeted by the government increases every year. Therefore, appropriate inventory planning is needed to realize the subsidized fertilizer production target that has been set by the government. The type of NPK fertilizer is one of the concerns because this type of subsidized fertilizer has a high demand rate, but its production figure is still far from the realization target. So that in this study the author aims to conduct a comparative analysis of inventory with the policies set by the company, namely Minimum-maximum with the Economic Order Quantity (EOQ) method. The EOQ method considers several costs, such as holding costs, raw material prices, and ordering costs. There are several outputs produced by the authors in this study, such as the frequency of orders, safety stock, reorder points, and total inventory costs. With this policy, the total cost of raw material inventory that must be spent for the manufacture of NPK fertilizer is Rp 4,257,606,170. And by using the EOQ method, it can save the company's total inventory cost of Rp. 121,368,688 or 2.77%.

Analysis of Supply Quantity Control of Argon Gas Raw Material At PT XY

The background in this research is that there is no method used to manage and control the quantity of raw material supplies at PT XY. This situation causes problems in ordering raw materials so that ordering costs and costs for storage will not be optimal. The purpose of this study was to determine the effect of applying the EOQ method to the total cost of raw material inventory at PT. XY. Raw material inventory costs can be minimized by applying the EOQ (Economic Order Quantity) method. This method can show the economic order quantity, optimal purchase frequency, time to reorder/ROP (Re-Order Point), and the amount of safety stock. Data collection was carried out using documentation techniques related to observation inventory documents and interviews with several informants, for data analysis using EOQ by calculating total inventory cost, ROP, reorder frequency and safety stock. The results of calculations and data analysis using the EOQ method show that the total cost of inventory is lower than the company's actual method.

Pentingnya Perencanaan dan Pengendalian Persediaan Bahan Baku Paving Dengan Metode Economic Order Quantity (EOQ) Untuk Optimalisasi Laba

This study aims to determine optimal raw material purchasing planning using the EOQ (Economic Order Quantity) approach at the Somber Berkah Sukosari Dagangan Madiun Regency company and to provide input regarding planning and controlling raw material inventory so that it has the potential to increase profit efficiency in the company. This study uses a quantitative descriptive method. The descriptive analysis technique used to analyze data regarding the problem of planning and controlling raw materials to optimize company profits is to use the EOQ (Economic Order Quantity), TIC (Total Inventory Cost), Safety Stock, Reorder Point, MI (Maximum Inventory) methods. From the research results it is known that the purchase of raw materials using the EOQ method total raw material inventory is less than using the method used by the company today. Besides, the frequency of purchasing raw materials using the EOQ method is smaller than using the company's method. In addition, there are also safety stocks, reorder points and MI (Maximum Inventory) that have been calculated, so that they can anticipate excess or shortage of raw material supplies. Therefore the EOQ method is very important to be applied in companies in order to achieve more optimal company profits.

OPTIMIZATION OF RICE INVENTORY USING FUZZY INVENTORY MODEL AND LAGRANGE INTERPOLATION METHOD

Interpolation is a method to determine the value that is between two values and is known from the data. In some cases, the data obtained is incomplete due to limitations in data collection. Interpolation techniques can be used to obtain approximate data. In this study, the Lagrange interpolation method of degree 2 and degree 3 is used to interpolate the data on rice demand. A trapezoidal fuzzy number expresses the demand data obtained from the interpolation. The other parameters are obtained from company data related to rice supplies and are expressed as trapezoidal fuzzy numbers. The interpolation accuracy rate is calculated using Mean Error Percentage (MAPE). The second-degree interpolation method produces a MAPE value of 30.76 percent, while the third-degree interpolation has a MAPE of 32.92 percent. The quantity of order respectively 202677 kg, 384610 kg, 1012357 kg, 1447963 kg, and a Total inventory cost of Rp. 129231797951.

Inventory Lot Sizing Decisions for Material Requirements Planning to Minimize Inventory Costs

<p><em>Inventory control is one of the most important factors in achieving optimal organizational performance. Material Requirement Planning (MRP) is a common method used by businesses to manage inventories. This study focuses on a hydraulic firm that has been in operation since 2016. This research examines the planning of eleven components to get the best planning for the company. This study contributes to the integration of Moving Average (MA) and Exponential Smoothing (ES) forecasting techniques alongside the MRP and three lot sizing techniques, such as LFL, EOQ, and LUC. T</em><em>he minimum error value</em><em>s</em><em> </em><em>between MA and ES are evaluated and followed by the comparison between three lot sizing techniques. The result shows that ES (α=0.1) is selected as the best forecasting technique, and LUC presents the lowest total inventory cost. However, LUC is only 0.05 percent lower than what LFL presents. A larger difference is shown by EOQ with 14.57 percent higher than LUC which makes EOQ unlikely to be selected.</em></p>

Inventory Management Analysis at UD Nuada Truss Tabanan Branch

Inventory management must be considered by the company so that the inventory costs incurred do not burden the company too high and anticipate the occurrence of inventory shortages. This research was conducted at UD Nuada Truss Tabanan branch with the aim of knowing whether the performance of inventory management is optimal or not. This study uses descriptive analysis techniques using quantitative and qualitative data obtained from observations and interviews. This descriptive analysis technique will be explained in stages starting with ABC analysis, calculating EOQ, safety stock, reorder point, maximum inventory, inventory turnover, and total inventory cost. The results showed that the inventory management implemented by UD Nuada Truss Tabanan branch was not optimal. This is shown by the comparison of the total inventory cost incurred by the company's inventory management which is higher than the inventory management using the EOQ method. the total inventory cost incurred by the company's inventory management was IDR 69,074,629, while the inventory management using the EOQ method was IDR 53,038,890. The application of inventory management using the EOQ method provides efficiency to the company in the amount of IDR 16,035,739 (23.22%).

Application of the Economic Order Quantity (EOQ) Method in Soybean Raw Material Inventory Control at the Haji Maman Tofu Factory in Matraman District, East Jakarta

This research is based on the lack of implementation of a method in controlling the inventory of soybean raw materials at Haji Maman’s Tofu Factory in the Matraman District of East Jakarta. Haji Maman’s Tofu Factory stil relies on daily records and sometimes uses estimates or assumption in its operational activities. In the procurement of raw materials, there is often an excess due to the lack of precise calculations regarding the ordering needs of raw materials, resulting in accumulation in the warehouse. In this study, the researcher utilized the Economic Order Quantity (EOQ) method, which determines the optimal quantity of raw material orders for each purchase, the optimal purchase frequency, and establishes the Re-Order Point. The approach and type of research used is a quantitative research method with a descriptive research approach. The objective of this study is to examine the implementation of the EOQ method in controlling the inventory of soybean raw materials at Haji Maman’s Tofu Factory in the Matraman District of East Jakarta. Data Collection was conducted through observation and interviews with Mr. Haji Maman, the owner. The data analysis technique employed was the EOQ method, taking into account purchase frequency, Re-Order Point, and Total Inventory Cost (TIC). The results of this study indicate that the optimal average frequency of raw material orders is 17 times per year. The total inventory cont using Haji Maman’s Tofu Factory policy amounts to Rp. 9,709,261, while using the EOQ method it amounts to Rp. 7,492,129, resulting in savings of Rp. 2,217,132 for Haji Maman’s Tofu Factory. The Re-Order Point is determined to be 216 kilograms.

Analysis Of Spare Parts Inventory Planning And Control To Improve Cost Efficiency At Pt Manunggal Jaya Makmur

PT Manunggal Jaya Makmur is one of the companies engaged in the transportation and contracting-based sector that provides integrated services from the start point to the end. In addition, it is also engaged in the repair of heavy equipment such as mixer trucks, dump trucks, colt diesel, and repair of other heavy equipment. In supporting the company's activities, PT. Manunggal Jaya Makmur implements a strategy for supplying raw materials and spare parts. In its operational activities, PT. Manunggal Jaya Makmur is still constrained by the overstock problem which ultimately causes a buildup of goods. In this study, material classification was carried out using ABC Theory analysis. Then the methods used in planning and controlling inventory management are the POQ and EOQ methods. After getting the results, the methods used during the research will be compared with the methods that have been applied so far in the company to find out the most effective methods to be applied in cost efficiency and work productivity and can maximize the profits received by the company. Based on the analysis carried out, the cost of calculating the total inventory of spare parts using the EOQ method was Rp. 205,513,000, the LFL method was Rp. 274,141,349 and the POQ method was Rp. 273,502,120. So, from these data, it can be concluded that the most optimal total cost of inventory is the EOQ method to produce greater profits and minimize overstock.

Safety Stock Placement Pada Perusahaan Farmasi Menggunakan Pendekatan Guaranteed-Service Dalam Jaringan Fasilitas Produksi

This study aims to understand the supply chain strategy of pharmaceutical companies, logistics drivers (facilities, inventory, and transportation), and cross-functional drivers (information, sources, and prices), as well as the problem of placing safety stock for assembly, using an integer linear approximation program using CPLEX to get the results and perform a sensitivity analysis. In this way, the effect of various parameters on total safety stock and service time can be estimated. Pharmaceutical companies can find strategic ways to align their goals with this method. The company already has an optimal supply chain focused on product quality, short response times, and product availability. In addition, it can minimize the total cost of safety inventory by using a piecewise linearization approach with a total assembly cost of Rp. 6,161,120,000, where safety stock is stored in stages 2-4, 7-14, 16, and 22, where 22 has the highest stage costs. Then a sensitivity analysis is carried out by allowing the parameters to vary, the more segments' total cost becomes stable. Furthermore, the relationship between the factors of safety, storage costs, and standard deviation is linear.

Aplikasi Metode EOQ Dalam Efisiensi Total Biaya Persediaan dan Optimasi Pengendalian Persediaan Bahan Baku Thinner di PT. XYZ

Raw material procurement policies play an important role in the production activities of a company. In order to maintain customer trust, PT. XYZ is very concerned about the quality and timeliness of the products it produces. This research was conducted to analyze raw material procurement policies and apply the Economic Order Quantity (EOQ) method which is considered effective as a measure to optimize inventory control efforts and minimize total inventory costs. This study shows that the total inventory cost (TIC) using EOQ has a more economical amount of Rp. 150,080, compared to the TIC resulting from company policy, namely Rp. 967,671. The EOQ model also takes into account the economical purchasing process which is carried out 5 times a year with a purchase quantity of 239 units per order, reorders are made when the remaining stock is 44 units and safety stock is 32 units. In order to maximize the inventory function, the maximum stock or limit on the availability of stock in the warehouse is also taken into account, which is 277 units.

Optimal inventory policies for finite horizon deterministic inventory models for non-instantaneous deteriorating items and permissible-delay in payment

This paper is concerned with the search for the optimal inventory policy for a finite horizon inventory model with time-varying demand, non-instantaneous deteriorating items, and permissible delay in payment. The optimal inventory policy consists of the determination of the number and timing of replenishment schedules that minimise some total inventory costs. The search for such policy is formulated as a mixed integer nonlinear programming problem (MINLP). It turns out that the non-instantaneous deterioration phenomenon coupled with permissible delay in payment introduce non-smoothness in the objective function of the MINLP. This leads to failure of direct applications of known solution methods to the MINLP. To circumvent this problem, a methodology is proposed for solving fully the MINLP problem. It is shown, through careful mathematical analysis, that earlier results on similar problems can be adapted to solve this problem. Conditions under which the solution of the MINLP is unique are identified. Moreover, convexity with respect to the number of replenishment orders is established. This makes the search for the optimal inventory policy handy. Numerical experiments are also conducted to test the applicability, to identify the key elements and to provide managerial insights to the model.

Development of Inventory Model to Reduce Total Inventory Costs at RSUD Mentawai

The inventory policy problem is a problem in the inventory system related to how to ensure that each usage demand can be met at minimal cost. In the healthcare industry, it is imperative that the procurement and use of stock is not only cost-effective, but also that the required stock is always available. Discrepancies between total inventory and usage can lead to damage to BMHP inventory as the items have expiry dates, as well as excess total inventory costs. The problem of total inventory costs exceeding the budget occurs because overstock is 83% of the total need, overstock is caused by an excessive number of drug orders purchased. The purpose of this study is to reduce the total cost of inventory by considering expiry costs, inspection cost, shortage cost, order cost, holding cost using the EOQ method. The first stage in this study is to calculate the optimal order quantity value, then find the expected number of drug expirations. These results will be used to calculate the total inventory cost of five types of medical materials. for the inspection cost value, if the number of expired medical materials is above 20, the inspection cost value is not equal to zero. The calculation results found that the total inventory cost was Rp. 162,904,965, this cost is less than the actual cost of Rp. 185,843,346.00 with a difference of 12%.

Penerapan Metode Economic Order Quantity (EOQ) Pada UD MBO Bakery di Kabupaten Jember

This research is a type of quantitative descriptive research with the aim of analyzing the optimal amount of wheat flour raw material inventory, safety stock, reoder point, total cost and comparing the company's conventional method of wheat flour raw material inventory control system with the EOQ method. The analytical tools used are the Economic Order Quantity (EOQ) method, order frequency, ROP (reorder point), SS (safety stock), TIC (Total Inventory Cost), and POM-QM software. Based on the results of the analysis, it is known that in 2022 the purchase of UD MBO Bakery raw materials was 139,575 kg with an order quantity of 2,908 kg or 116 bags/order and an order frequency of 50 times/year with an average of 4 times/month and a total inventory cost of IDR 3,919,700.00. Calculations using the EOQ method obtained the optimal amount of raw material purchases in 2022 of 8,063 kg or 322 bags per order with a frequency of purchases of 17 times/year or orders every 18 days and the total cost of inventory using the EOQ method is IDR 2,419,040.81. This shows that calculations using the EOQ method can save total inventory costs of IDR 1,500,659.19.

Implementation of Material Requirement Planning (MRP) in Controlling Raw Materials for Shoes Products at PT.XYZ

PT. XYZ is an industry in East Java that produces products made from animal skins as raw materials. The product produced by this industry is loafers. So far, this industry has had problems with leather raw materials which often experience excess supply requiring high investment, although at certain times they also experience shortages which result in not fulfilling consumer demand. MRP is a system specifically designed to ensure the availability of materials, items or components when needed to meet production schedules and ensure the availability of finished products for consumers in situations of surging demand. MRP can answer exactly what material, how much, and when (what, how much and when) is needed so that the production process can run according to schedule. The results of this study indicate that the Material Requirement Planning (MRP) method has a total raw material inventory control cost of Rp. 189,646,600 and by using the company's method, the raw material control value is Rp. 323,325,500 Savings in raw material control costs that can be obtained by applying the MRP method are Rp. 17,416,700 or about 0.94%.

Minimizing Fresh Fruit Bunches Inventory Costs Using Continuous Review System and Blanked Order System Methods

PT X is a company engaged in palm oil processing. The company's inventory of FFB raw materials is erratic, depending on the production needs. In processing palm oil raw materials, companies in the logistics or inventory department cannot be separated from the problem of FFB raw material inventory, which is part of the primary needs for company production. This company faces issues, namely the fluctuation in demand and lead time for placing orders, which can cause stockouts and shortages in FFB raw material inventories, which disrupts production process activities. The purpose of the research conducted was to conduct an analysis of raw material inventory control using the continuous review system and blanked order system methods to avoid the occurrence of raw material shortages in the raw material inventory to be used and to minimize the total inventory costs that must be incurred at the company and determine the best inventory method. The results obtained from this study were getting a safety stock of 1,638 tons and a known reorder point of 5,093 tons for the schedule of reordering FFB raw materials using the continuous review system method. Based on the results of calculating inventory costs using the constant review system method, it is the most optimal method with a minimal total inventory cost compared to the blanked order system method and the previous company policy, with savings generated by 0.10%.

A heuristic approach for multi-echelon inventory optimisation in a closed-loop supply chain

This study deals with a closed-loop supply chain where inventory levels are controlled by an order-up-to inventory policy. The system under consideration is the cylinder-packaged gas supply chain of Air Liquide company, where empty cylinders used by customers are returned to be filled again by company plants. First, we examine the goodness of fit for demand distributions based on company real data. This enables us to better characterise demands pertaining to different classes of products. Then, we formulate the multi-echelon serial inventory model to be optimised and propose a heuristic to compute the target inventory levels that helps in achieving the desired customer service level while minimising the total inventory cost. The proposed heuristic is easy to implement in the field and gives results close those obtained using a simulation-optimisation approach that is more time-consuming. Finally, we perform a numerical analysis based on company real data and compare several methods that can be used to compute the target inventory levels by varying mainly two assumptions: parameters regarding demand distributions and metrics used to assess customer service levels.

Perencanaan Kebijakan Persediaan Vaksin Booster Dengan Metode Continuous Review (s,S) Untuk Mengurangi Overstock Di Rumah Sakit Tentara Kota Pematangsiantar

Pematangsiantar City Army Hospital is one of the state-owned health facilities that provides booster vaccination services with 4 types of booster vaccines available, namely sinovac, astrazeneca, pfizer and moderna. The uncertain level of demand for booster vaccines causes the Pematangsiantar City Army Hospital to require booster vaccine inventory policy planning using the continuous review (s,S) method to prevent overstock which results in considerable cost expenditures. From the calculation of booster vaccine inventory control using the continuous review method (s,S), it is obtained that the total inventory cost has a significant percentage change. For the type of sinovac, the percentage change in total inventory costs reaches 92% of the total inventory costs in the existing conditions, for astrazeneca reaches 58% of the total inventory costs in the existing conditions, for pfizer reaches 60% of the total inventory costs in the existing conditions, and for moderna reaches 95% of the total inventory costs in the existing conditions. The results of the calculation of the total cost of inventory with continuous review (s,S) can provide a decrease in costs incurred by the Pematangsiantar City Army Hospital. This is because the continuous review (s,S) inventory policy minimises the cost of vaccine shortages which are quite costly.