Using of EOQ and EPQ Methods in Minimizing Inventory Cost of Crude Palm Oil

2020 ◽  
Vol 4 (1) ◽  
pp. 36
Author(s):  
Linda Kumala Sari ◽  
Sajaratud Dur ◽  
Ismail Husein
Keyword(s):  
Palm Oil ◽  
Crude Palm Oil ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Production Quantity ◽  
Total Inventory ◽  
The Difference ◽  
The Cost

<span lang="EN-US">Excess or lack of inventory that is too large is a problem that can trigger increased costs so that companies do not get the benefits they should. The purpose of this study is to minimize the cost of inventories of crude palm oil using the EOQ (Economic Order Quantity) method and EPQ (Economic Production Quantity) methods at PT. Perkebunan Nusantara IV (Persero) Medan. From the results it is known that economic orders according to the EOQ method in 2017 amounted to 2.741,222 tons and in 2018 amounted to 2.825,927 tons. The difference in total inventory costs generated using the EOQ method and company conditions in 2017 amounted to Rp71.605.439.976,17 and in 2018 amounting to Rp60.884.174.907,3. The optimal amount of production (EPQ) in 2017 and 2018 was 146.226,147 tons. The difference in total inventory costs generated using the EPQ method and the condition of the company in 2017 and 2018 amounted to Rp102.771.704.121,63.</span>

scholarly journals Analisis Persediaan Produk Gula Rafinasi Menggunakan Metode Economic Production Quantity

2021 ◽  
Vol 2 (1) ◽  
pp. 1
Author(s):  
Edo Rantou Wijaya ◽  
Titania Titania
Keyword(s):  
Production Cycle ◽  
Time Interval ◽  
Inventory Cost ◽  
Production Time ◽  
Optimal Production ◽  
Inventory Costs ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Production Quantity ◽  
Total Inventory

Overload is a condition where the goods stored in the warehouse exceed the existing capacity. With the accumulation, it will increase the storage cost for the products/goods stored. The purpose of this research was to help companies determine the optimal amount of production, optimal production time intervals and maximum product inventory so that there is no excess stock of products in the warehouse, and to obtain a minimum total inventory cost by using the Economic Production Quantity (EPQ) model. To collect the data needed in this study, secondary data was used which consists of production data and product delivery of company X. From the research results, the optimal production rate (Q*) is 13,646 MT/production cycle with an optimal production time interval of 1.16 months. or equal to 35 days, the maximum amount of inventory (Imax) was 429 MT. The total minimum inventory cost in one production cycle/month is Rp.167,925,698.28, -. The difference in total inventory costs generated using the EPQ method and calculations based on company conditions is 9% or equivalent to Rp.16,538,501, -. Based on the results of the sensitivity analysis it was known that all parameters are sensitive to Q*, Imax, and total inventory costs. However, a significant change is the parameter of saving costs, where the increase and decrease in saving costs will decrease and increase Q*, Imax, and the total cost of inventory.

scholarly journals Penerapan Metode EPQ(Economic Production Quantity) Pada Pengendalian Bahan Baku Laundry Di Samarinda Laundry Mart Barbasis Android

2020 ◽  
Vol 22 (1) ◽  
pp. 64-72
Author(s):  
Hanifah Ekawati ◽  
Pitrasacha Adytia ◽  
Yunita Yunita
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Optimal Time ◽  
Optimal Production ◽  
Inventory Costs ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Production Quantity ◽  
Total Inventory ◽  
Production Frequency

Samarinda Laundry Mart is a business that provides laundry services, besides that it is also a supplier of laundry raw materials in Samarinda. Control of laundry raw materials in the laundry business is a complicated problem. Therefore one method that can be used for raw material control is the EPQ method (Economic Production Quantity) where the EPQ method can determine the optimal production level, optimal production frequency, optimal time cycle to minimize total inventory costs. The results of this study are made inventory control applications using the EPQ method that can make calculations automatically. Only by entering monthly data that is already available. Users can also make transactions using the application so that all data has been integrated in the database to facilitate management in the laundry business. In addition, this application can also print transaction reports and turnover reports.

scholarly journals Analisis Jumlah Produksi Kerudung Pada RAR Azkia Bandung Dengan Metode Economic Production Quantity (EPQ)

Matematika ◽  
2017 ◽  
Vol 16 (2) ◽  
Author(s):  
Farid H Badruzzaman ◽  
Erwin Harahap ◽  
Eti Kurniati ◽  
M. Deni Johansyah
Keyword(s):  
Inventory Cost ◽  
Optimal Amount ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Epq Model ◽  
Production Quantity ◽  
Total Inventory ◽  
Optimum Solution ◽  
Optimum Production ◽  
Production Demand

Abstrak. Permasalahan dari persediaan adalah bagaimana menentukan jumlah produksi optimal dengan biaya total persediaan yang minimum. Sebuah persediaan dilakukan tidak lain dengan maksud mengantisipasi dan memenuhi permintaan yang akan datang. Penyimpanan persediaan dalam jangka waktu yang lama akan berdampak pada keusangan dan menurunnya kualitas, sehingga diperlukan perhitungan jumlah persediaan yang optimal. Model persediaan Economic Production Quantity (EPQ) merupakan suatu metode yang digunakan untuk mempertimbangkan jumlah produksi dan jumlah permintaan hasil produksi. Tujuannya adalah dengan menentukan banyaknya produksi yang meminimumkan total biaya persediaan. Penelitian ini bertujuan untuk menghitung jumlah produksi optimum pada perusahaan kerudung. Selama ini, jumlah produksi pada tahun 2017 dan sebelumnya berpedoman pada jumlah pesanan pelanggan ditambah 17,5% dari jumlah permintaan untuk cadangan persediaan. Hasil solusi optimum dengan model EPQ memiliki perbedaan yang signifikan dibandingkan dengan yang selama ini berlaku.Kata Kunci: economic production quantity, persediaan, produksiAbstract. The problem of inventory is how to determine the optimal amount of production with minimum total inventory cost. An inventory is carried out with no other intent to anticipate and meet future demand. Storage of inventory over a long period of time will have an impact on obsolescence and declining quality, so it is necessary to calculate the optimal amount of inventory. Model inventory Economic Production Quantity (EPQ) is a method used to consider the number of production and the number of production demand. The goal is to determine the amount of production that minimizes the total cost of inventory. This study aims to calculate the number of optimum production on the company's hood. So far, the number of production in 2017 and previously guided by the number of customer orders plus 17.5% of the total demand for inventory reserves. The results of the optimum solution with the EPQ model have significant differences compared to those currently in force.Keywords: economic production quantity, inventory, production

Fuzzy Economic Production Quantity Model for Weibull Deteriorating Items with Ramp Type of Demand

2011 ◽  
Vol 2 (3) ◽  
pp. 55-90 ◽  
Author(s):  
R. Uthayakumar ◽  
M. Valliathal
Keyword(s):  
Deteriorating Items ◽  
Quantity Discounts ◽  
Setup Cost ◽  
Economic Production Quantity ◽  
Deterministic Demand ◽  
Economic Production ◽  
Holding Cost ◽  
Production Quantity ◽  
Delay In Payments ◽  
The Cost

This paper discusses an Economic Production Quantity model for Weibull deteriorating items over an infinite time horizon under fuzzy environment. Fuzziness is introduced by allowing the cost components such as setup cost, production cost, holding cost, shortage cost and opportunity cost due to lost sales to certain extent. Triangular fuzzy numbers are used to represent the mentioned costs. Optimum policies of the described models under fuzzy costs are derived. The proposed model can be extended in several ways. For instance, the deterministic demand function to stochastic fluctuating demand patterns could be considered. The model could also be generalized to allow for quantity discounts, as well as permissible delay in payments.

scholarly journals Pengembangan Model Economic Production Quantity (EPQ) dengan Sinkronisasi Demand Kontinu dan Diskrit Secara Simultan

2016 ◽  
Vol 15 (1) ◽  
pp. 78 ◽  
Author(s):  
Nurike Oktavia ◽  
Henmaidi Henmaidi ◽  
Jonrinaldi Jonrinaldi
Keyword(s):  
Total Production ◽  
Lot Size ◽  
Inventory Cost ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Holding Cost ◽  
Epq Model ◽  
Production Quantity ◽  
Set Up ◽  
Production Lot Size

The most popular inventory model to determine production lot size is Economic Production Quantity (EPQ). It shows enterprise how to minimize total production cost by reducing inventory cost. But, three main parameters in EPQ which are demand, machine set up cost, and holding cost, are not suitable to solve issues nowadays. When an enterprise has two types of demand, continue and discrete demand, the basic EPQ would be no longer useful. Demand continues comes from a customer who wants their needs to be fulfilled every time per unit time, while the fulfillment of demand discrete is at a fixed interval of time. A literature review is done by writers to observe other formulation of EPQ model. As there is no other research can be found which adopt this topic, this study tries to develop EPQ model considering two types of demand simultaneously.

Review on Inventory Controlling of Building Materials Supply Chain from Uncertainty Demands in Civil Engineering

2012 ◽  
Vol 174-177 ◽  
pp. 3441-3443
Author(s):  
Bin Yang
Keyword(s):  
Supply Chain ◽  
Building Materials ◽  
Simulated Annealing Algorithm ◽  
Supply And Demand ◽  
Cost Models ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Total Inventory ◽  
Annealing Algorithm ◽  
The Difference

Inventory control is a necessary strategy that enterprises use to offset the effect of uncertainties in manufacturing, supply and demand. Normally, probability distribution is used to analyze the uncertainty problems, however, this analysis can’t be completed with inadequate data, resulting in an increase in inventory costs. The paper establishes inventory cost models of single supply chain member under uncertainty demands and applies Simulated Annealing Algorithm to imitate the models in 52 weeks to seek for the optimal speaking for amount and anew speaking for point so that compares the difference of supply chain total inventory cost and the sufficing rate of order for goods between independently and collaborated controlling strategy in supply chain, and in order to provide the necessary theoretical supports for the enterprises to establish supply chain partnerships and possibly improve the supply chain capability of providing external integration.

scholarly journals An EPQ Model with Unit Production Cost and Set-Up Cost as Functions of Production Rate

2013 ◽  
Vol 2013 ◽  
pp. 1-6 ◽  
Author(s):  
Behrouz Afshar-Nadjafi
Keyword(s):  
Production Rate ◽  
Production Cost ◽  
Continuous Functions ◽  
Optimal Production ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Epq Model ◽  
Production Quantity ◽  
Set Up ◽  
The Cost

Extensive research has been devoted to economic production quantity (EPQ) problem. However, no attention has been paid to problems where unit production and set-up costs must be considered as functions of production rate. In this paper, we address the problem of determining the optimal production quantity and rate of production in which unit production and set-up costs are assumed to be continuous functions of production rate. Based on the traditional economic production quantity (EPQ) formula, the cost function associated with this model is proved to be nonconvex and a procedure is proposed to solve this problem. Finally, utility of the model is presented using some numerical examples and the results are analyzed.

scholarly journals A producer-retailer incorporated multi-item EPQ problem with delayed differentiation, the expedited rate for common parts, multi-delivery and scrap

2021 ◽  
Vol 12 (4) ◽  
pp. 427-440 ◽  
Author(s):  
Yuan-Shyi Peter Chiu ◽  
Tiffany Chiu ◽  
Fan-Yun Pai ◽  
Hua Yao Wu
Keyword(s):  
Hessian Matrix ◽  
Collective Effects ◽  
Mathematical Methods ◽  
Critical System ◽  
Economic Production Quantity ◽  
Delayed Differentiation ◽  
Economic Production ◽  
Crucial Information ◽  
Production Quantity ◽  
The Cost

Transnational producers facing the present-day competitive global supply-chain environments need to pursue the most appropriate manufacturing scheme, quality screening task, and stock shipping plan to satisfy customer’s timely multi-item requirements under minimum overall product fabrication-delivery expenses. This study develops a producer-retailer incorporated multi-item two-stage economic production quantity- (EPQ-) based system with delayed differentiation, expedited-rate for common parts, multiple deliveries plan, and random scrap. It aims to assist current manufacturing firms in achieving the aforementioned operating goals. Mathematical methods help us build an analytical model to explicitly portray the studied problem’s features and derive its overall system expenses. Hessian matrix equations and optimization approaches help us prove convexity and derive the cost-minimized fabrication- delivery decision. This study gives a simulated example to illustrate the research outcome’s applicability and the proposed model’s capabilities numerically. Consequently, diverse crucial information becomes obtainable to the manufacturers to facilitate various operating decision makings as follows: (i) the cost-minimized fabrication-delivery policy; (ii) the behavior of system’s overall expenses and operating policy regarding mean scrap rate, and different relationships between common part’s values and completion-rate; (iii) the system’s detailed cost components; (iv) the system’s overall expenses, utilization, and common part’s uptime concerning different common part’s expedited rates; and (v) the collective effects of critical system features on the overall expenses, uptime, and optimal cycle length, etc.

scholarly journals A Geometric Programming Solution to an Economic Production Quantity Model with Ranking Fuzzy Numbers Cost Parameters

2019 ◽  
Vol 8 (2S3) ◽  
pp. 747-750
Keyword(s):  
Numerical Model ◽  
Geometric Programming ◽  
Fuzzy Numbers ◽  
Programming Method ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Production Quantity ◽  
Cost Parameters ◽  
The Cost ◽  
Programming Solution

on this paper, a financial creation quantity is figured to hold up a era framework with restrict, adaptability, unwavering first-class, and circumstance supportability with switch fee of non-appealing object. The cost parameters are spoken to as a trapezoidal fluffy numbers and those fluffy numbers are communicated as positioning fluffy numbers with satisfactory guess period in-between. Geometric programming method is attached to determine the precise selections in close from. A numerical model is given to help the difficulty.

scholarly journals Pengembangan Model Economic Production Quantity Mengakomodasi Continue dan Discrete Demand serta Kebijakan Rework Secara Simultan

2020 ◽  
Vol 1 (1) ◽  
pp. 8
Author(s):  
Nurike Oktavia ◽  
Henmaidi Henmaidi ◽  
Prima Fithri
Keyword(s):  
Geometric Mean ◽  
Mathematical Formulation ◽  
Production Costs ◽  
Production Cycle ◽  
Total Production ◽  
Inventory Costs ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Epq Model ◽  
Production Quantity

Inventory of finished goods needs to be planned and controlled regularly. Fulfilling customer demand whenever and wherever is the main purpose of the supply. This issue is related to production activities. Many companies use the Economic Production Quantity (EPQ) Model in determining the size of their lot productions. This model is able to show how to minimize total production costs by reducing inventory costs. Customer behavior at PT XYZ makes product delivery divided into 2 types. The first type, finished goods is sent continuously in small amounts called continue demand. The second type, products is sent between certain time intervals in large quantities called discrete demand. Basic EPQ Model’s parameters do not accommodate a system like this. In addition, PT XYZ requires rework for products that do not pass the quality test. Therefore, this research was developed to formulate EPQ model that can accommodate two types of demand, continue and discrete, as well as the existence of rework policy. This study tries to provide another approach in solving the derivation problem using the "Arithmetic-Geometric Mean" method. The results of this study will display a mathematical formulation to find the optimal production cycle time for PT XYZ. Numerical examples are discussed to show practical models.

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