scholarly journals Application of Langrangian Theory in Inventory Cost Reduction of a Firm

2020 ◽  
Vol 5 (2) ◽  
Author(s):  
Taofik K Oriolowo ◽  
Kolawole A Oladejo ◽  
Rahaman Abu ◽  
Wole A Ayanrinde ◽  
Sakiru G Adesokan
Keyword(s):  
Cost Reduction ◽  
Raw Materials ◽  
Inventory Model ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Pareto Analysis ◽  
Eoq Model ◽  
Unit Space

Current events confirm the vital and dynamic need for studies that embrace Economics, Engineering, Management, and many other disciplines to confront the difficulties encountered in converting raw inputs to manufacturing outputs. This paper presents the assessment of inventory control system in a typical steel construction firm in Ibadan, Nigeria, with a view to predicting how best the inventory cost can be reduced. Data were collected by interviewing appropriate respondents at the production, stores, transport, purchasing, accounts, and wages sections of the firm and relevant documents used between the year 2014 and 2019. These were tailored towards identifying the controllable variables that were later classified using ABC Pareto analysis; implementation of an inventory model (Langrangian Multiplier) by mathematically relating the variables to the total cost; and evaluating the optimal values of the variables and the optimal cost of the system. The raw materials of the outfit were found to involve 88 items; which were grouped into 5, 20 and 63 items for classes A, B, and C respectively in accordance to ABC Pareto analysis. The identified controllable variables involved premises rent, unit ordering cost, annual demand, unit space and unit holding cost. On implementing the model, the annual total inventory cost was found to be N307,446.25, N154,667.50, and N84,035.00 for quarterly, bi-annual and annual inventory policies respectively; while the annual Economic Order Quantity (EOQ) was found to be N45,110.65 per annum. This shows that the company’s inventory cost can be reduced by N262,335.60  (85%), if the Annual Economic Order Quantity (proposed model)is implemented. This study has revealed the effect of implementing a standard inventory model for cost reduction in the area of material management.Keywords—Economics, Engineering, EOQ model, Inventory cost reduction, Management.

scholarly journals PENGENDALIAN PERSEDIAAN BAHAN BAKU DALAM PROSES PRODUKSI DENGAN MENGGUNAKAN METODE ECONOMIC ORDER QUANTITY (EOQ)

2019 ◽  
Vol 1 (2) ◽  
pp. 415-423
Author(s):  
Elia Rahayu R ◽  
Nor Norisanti ◽  
Acep Samsudin
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Analysis Method ◽  
Inventory Cost ◽  
Total Inventory ◽  
The Difference ◽  
Quantitative Descriptive

The purpose of this study is to control the supply of raw materials using the Economic Order Quantity (EOQ) method in Tahu Nugraha Jaya Sukabumi UKM. The data analysis method used is quantitative descriptive to describe and describe the data to be examined and then processed using EOQ. This study uses the EOQ method to determine the total inventory cost. The data needed in this study are the number of purchases of raw materials, the amount of use of raw materials, storage costs, and ordering costs. The results of this study indicate that by applying the EOQ method can further optimize the supply of raw materials by minimizing raw materials with increased inventory. With the application of the Economic Order Quantity (EOQ) method it shows more efficient than conventional methods of the company. Conclusions, seen from the difference in the TIC of the two methods, the more efficient method is the Economic Order Quantity (EOQ) method that is equal to 244,392.94 while the calculation used by the company is 374,325. so that it can be obtained that there is a difference between the Company TIC and the EIC method TIC. Keywords: Raw Material Inventory, Production Process

Economic Order Quantity Model for Minimizing Total Inventory Cost at PT PQR in Indonesia

2015 ◽  
Vol 21 (4) ◽  
pp. 1053-1056
Author(s):  
Bachtiar H. Simamora
Keyword(s):  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Traditional Practice ◽  
Inventory Costs ◽  
Eoq Model ◽  
Total Inventory

The purpose of this research is to see whether an Economic Order Quantity model can be used to reduce cost of inventory significantly in PT PQR, manufacturer of spring and sponge mattresses in Pekanbaru, Indonesia. The research was conducted on three main materials required in producing spring and sponge mattresses. Using Economic Order Quantity (EOQ) model to analyze historical demand on main materials, it is proven that with EOQ model the company can save by more than 45% from procuring and inventory costs of those materials. The research continues to forecast the sales demand to get the annual requirement of materials needed in 2014 and calculate the EOQ model again. The results show that, comparing with traditional practice done by company, EOQ model can reduce costs up to 118 million rupiah per year.

scholarly journals ANALISIS BIAYA PERSEDIAAN BAHAN BAKU IKAN DAN PERHITUNGAN ECONOMIC ORDER QUANTITY (EOQ) PADA RUMAH MAKAN IKAN BAKAR KINAMANG

2018 ◽  
Vol 13 (02) ◽  
Author(s):  
Melinda Miranda Wijaya ◽  
David P. E. Saerang ◽  
Meily Y. B. Kalalo
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Safety Stock ◽  
Purchase Order ◽  
Reorder Point ◽  
The Cost

            The cost of raw material inventory is a sacrifice of economic resources, measured in units of money, which have occurred or are likely to occur for raw material inventory, consisting of purchase costs, storage costs, and inventory shortage. This study aims to determine (1) Total Inventory Cost (TIC) based on RM policy. Kinamang Fuel Fish and Economic Order Quantity (EOQ) method during 2017 (2) Frequency of ordering of efficient fish raw material during 2017 (3) Quantity of safety stock and when to reorder point of raw materials fish in RM. Ikan Bakar Kinamang during 2017. This research is a descriptive research with qualitative approach. And use case study method. The result of the research shows that the Cost of Fish Raw Material Supplies at Kinamang Fuel Fish Restaurant is still not economical because the purchase (order) is only based on the previous sales estimate, and does not take into account economically the expenses incurred for the purchase and storage of fish raw materials the. Precisely with the calculation of Economic Order Quantity (EOQ), the cost of raw materials inventory of fish is much less, and can determine properly and correctly about the safety stock (safety stock), and reorder (reorder point).Keywords: Inventory Cost, EOQ, Frequency, Safety Stock, ROP

ANALISIS PENGENDALIAN PERSEDIAAN DENGAN METODE EOQ USAHA STAN KAYU SINAR SOWI KABUPATEN MANOKWARI

2020 ◽  
Vol 2 (2) ◽  
pp. 340
Author(s):  
Rizkyani Pratama ◽  
Yulius H Saptomo ◽  
Dirarini Sudarwadi
Keyword(s):  
Raw Materials ◽  
Case Study Research ◽  
Cost Savings ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Total Inventory

Controlling and determining of inventory is an important thing in order to produce efficiently and able to make smooth sales. The purpose of this research is to know an analysis of controlling raw material inventoriesin the manufacture of brick by using Economic Order Quantity (EOQ) method to increase efficiency of the total inventory costin Stan Kayu Sinar Sowi. The raw material of brick is rough sand and cements. Type of case study research through a qualitative approach by means of interviews, observation and documentation. Case study on a wood booth business in Manokwari, West Papua. The results of the study that the purchase of raw materials made by the company is considered less efficient, because company policies tend to cause expenditure to be greater in the amount of Rp.606,620,250 for 12 months (1 period), while using the Economic Order Quantity (EOQ) method will issue a fee of Rp.550,712,500 for the same period. Using the Economic Order Quantity (EOQ) method, the order quantity is higher and the order frequency will be lower, resulting in order cost savings and increasing the total inventory cost efficiency.

scholarly journals Tinjauan Kapasitas Persediaan Produk Fuji Seat PT. Tri Jaya Teknik Karawang

2021 ◽  
Vol 5 (1) ◽  
pp. 33
Author(s):  
Aries Adiyanto ◽  
Dene Herwanto
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Administrative Costs ◽  
Eoq Model ◽  
Engineering Company ◽  
Holding Cost ◽  
The Cost

PT. Tri Jaya Teknik Karawang is an engineering company engaged in fabrication, machining and side parts. PT. Tri Jaya Teknik started pioneering a business since 2007 and started owning and occupying its own workshop in 2009. Currently the company already has 2 plant workshops with a total area of 3,080 m2 and has about 100 employees. One of the products produced is Fuji seat, based on the data collected there are 3 parts of the process. The 3 parts of the process are repair 1, repair 2, repair 3. With each there is a check parts & packing table. The method used in companies to manage raw material inventories is still conventional, namely by making continuous purchases without estimating according to needs. So that there is often an excess of raw materials or a shortage of raw materials at a certain time, this makes the costs incurred inefficient and often disrupts the production process. A review of the inventory capacity of Fuji Seat products in this study was carried out using the Economic Order Quantity (EOQ) model. The main raw material inventory data used is Fuji Seat in the 2016-2019 period. Holding cost raw materials is set by PT. Tri Jaya Teknik Karawang is 2.5% of the price per pcs, this value is used for procurement and repair of tools and equipment in the warehouse. If there is no damage, the cost is allocated to the warehouse manager in that month. Meanwhile, the cost of ordering which consists of the price of goods and shipping costs is determined by PT. Tri Jaya Teknik Karawang, amounting to IDR 100,000.00. This fee includes administration and transportation costs. Administrative costs, namely executive salaries and other supporters, as well as taxes related to the company. The cost of shipping transport is the distance traveled and the weight of the product ordered. Based on the calculation of EOQ (Economic Order Quantity), the most economical amount of raw materials using the EOQ model is 6,815.5 Pcs with 187 purchases a year. PT. Tri Jaya Teknik Karawang adalah perusahaan engineering yang bergerak di bidang fabrikasi, machining dan part samping. PT. Tri Jaya Teknik mulai merintis bisnis sejak tahun 2007 dan mulai memiliki dan menempati workshop sendiri di tahun 2009. Saat ini perusahaan telah memiliki 2 plant workshop dengan total luas 3.080 m2 dan memiliki karyawan berjumlah sekitar 100 orang. Salah satu produk yang dihasilkan adalah fuji seat, berdasarkan data yang dikumpulkan ada 3 bagian proses. 3 bagian proses itu adalah repair 1, repair 2, repair 3. Dengan masing-masing terdapat meja check part & packing. Metode yang digunakan pada perusahaan untuk mengelola persediaan bahan baku masih secara konvensional, yaitu dengan melakukan pembelian terus menerus tanpa memperkirakan sesuai dengan kebutuhan. Sehingga seringkali terjadi kelebihan bahan baku atau kekurangan bahan baku di saat tertentu, hal ini membuat biaya yang dikeluarkan menjadi tidak efisien dan sering kali mengganggu proses produksi. Tujuan penelitian ini yaitu mampu mengetahui perhitungan EOQ dan frekuensi pembelian yang paling ekonomis dalam perusahaan. Tinjauan kapasitas persediaan produk Fuji Seat dalam penelitian ini dilakukan dengan menggunakan model Economic Order Quantity (EOQ). Data persediaan bahan baku utama yang digunakan adalah Fuji Seat pada periode 2016-2019.Biaya penyimpanan bahan baku di tetapkan oleh pihak PT. Tri Jaya Teknik Karawang sebesar 2,5% dari harga per pcs, nilai tersebut digunakan untuk keperluan pengadaan dan perbaikan 

scholarly journals Analisis Pengendalian Ketersediaan Bahan Baku Di PT. Akasha Wira Internasional, Tbk Menggunakan Metode EOQ

2020 ◽  
Vol 2 (1) ◽  
pp. 22
Author(s):  
Sandi Wardani ◽  
Sri Rahayuningsih ◽  
Ana Komari
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Optimal Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Safety Stock ◽  
Reorder Point ◽  
Total Inventory

This study aims to analyze the availability of raw materials at PT. Akasha Wira Internasional Tbk, analyzes the total cost of raw material inventories, analyzes to reorder point raw materials, analyzes the amount of safety stock of raw materials, analyzes raw material inventory control. The analytical method used is the Economic Order Quantity method, which is to find out the optimal order or purchase quantity with the aim of minimizing inventory costs consisting of ordering costs and storage costs. The results showed that the purchase of optimal ades 1500 ML label raw materials according to the Economic Order Quantity method during the 2017 period for each message was greater than what the company did. The optimal purchase of raw materials that must be done by the company in 2017 is 397 m with the frequency of ordering that must be done as much as 2 times. The safety stock quantity that must be available in the warehouse is 480.15 m and the Re Order Point according to the Economic Order Quantity is at the time of the inventory in the warehouse is 512.91 m. The total inventory cost for the production process incurred according to the Economic Order Quantity method is smaller than the total inventory cost incurred by the company. Keywords: Inventory, Raw Materials, Economic Order Quantity  Penelitian ini bertujuan untuk menganalisis ketersediaan bahan baku di PT. Akasha Wira Internasional Tbk, menganalisis total biaya persediaan bahan baku, menganalisis untuk melakukan pemesanan kembali (reorder point) bahan baku, menganalisis jumlah persediaan pengamanan barang  (safety stock) bahan baku, menganalisis pengendalian persediaan bahan baku. Penggunaan pendekatan yaitu metode Economic Order Quantity sebagai cara menyimpan bahan baku untuk ketersediaan biaya pesan dan biaya simpan bahan baku. Data yang diperoleh adalah data primer dan data sekunder. Pada bahan baku  ades 1500 ML tahun 2017 memiliki tingkat pemesanan yang lebih tinggi. Pembelian bahan baku optimal yang harus dilakukan perusahaan pada tahun 2017 adalah sebesar 397 m dengan frekuensi pemesanan yang harus dilakukan adalah sebanyak 2 kali. Kuantitas persediaan pengaman yang harus tersedia digudang adalah sebesar 480,15 m dan titik pemesanan kembali menurut Economic Order Quantity yaitu saat persediaan digudang tinggal 512,91 m. Maka dalam proses produksi menurut EOQ lebih kecil diabnding dengan total pembiayaan dari perusahaan.  Kata Kunci :  Persediaan , Bahan Baku, Economic Order Quantity

scholarly journals MODEL ECONOMIC ORDER QUANTITY (EOQ) DAN MODEL OPTIMISASI ROBUST DALAM PENENTUAN PERSEDIAAN ALAT SUNTIK (SPUIT)

2019 ◽  
Vol 8 (3) ◽  
pp. 164
Author(s):  
PUTRI BELLA SAGITA ◽  
NI KETUT TARI TASTRAWATI ◽  
KARTIKA SARI
Keyword(s):  
Robust Optimization ◽  
Optimization Model ◽  
Inventory Model ◽  
Buffer Stock ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Minimum Order ◽  
Eoq Model ◽  
Order Quantities

The purpose of this research is to determine and analyze the minimum order quantities and the supply cost through Economic Order Quantity (EOQ) Model without Stock Out, EOQ Model with Buffer Stock, and Robust Optimization. EOQ model without Stock Out is an inventory model with a fixed number of requests and a fixed period of demand so the goods are considered always available or there is no stock out. Whereas EOQ Model with Buffer Stock is an inventory model with uncertainty demand during the lead time that described with a uniform density function. Another model is Robust Optimization Model that is used for cases with uncertainty demand. The results showed that the minimum order quantities through EOQ Model without Stock Out and EOQ Model with Buffer Stock was almost the same value but the cost was more minimum with the EOQ Model with Buffer Stock. Whereas, through the Robust Optimization Model there are different minimum order quantities for each period with a minimum supply cost compared to the two previous models. This occurs in both types of Spuit, namely Spuit Terumo 3 mL and Spuit Terumo 5 mL.

scholarly journals Analysis Inventory Cost Jona Shop with EOQ Model

2021 ◽  
Vol 3 (1) ◽  
pp. 21-25
Author(s):  
Abigail Vania ◽  
Hanni Yolina
Keyword(s):  
Lead Time ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Valid Model ◽  
Inventory Costs ◽  
Eoq Model ◽  
Holding Cost

Jona Shop is located in Indonesia, Jakarta is currently having a problem. The problem is the shop’s owner thinks that the inventory costs are too big especially for a powdered drink which brand is “Nutrisari”. The author finishes an EOQ (Economic Order Quantity) model for minimize the inventory cost. EOQ model is an old model but a valid model which still used now. Even EOQ model is an old model, many researchers used EOQ model to minimize inventory cost until 50% or more than 50%. But the EOQ model has some assumptions and Jona Shop fulfilled all the assumptions in the EOQ model. The assumptions of EOQ model are demand is known and constant, the lead time is constant and known, only one product can be estimated, every order is accepted in one-time delivery and can be used right away, there is no backorder because run out stock, no discount, and the holding cost per year and the ordering cost per year are constant. The result of the EOQ model can save up to almost 90%.

scholarly journals Pengembangan Aplikasi Decission Support System untuk Kasus Model Inventory

2020 ◽  
Vol 22 (2) ◽  
pp. 156-162
Author(s):  
Eko Nur Hidayat
Keyword(s):  
Support System ◽  
Inventory Model ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Eoq Model ◽  
Classical Economic

Keakuratan data merupakan modal untuk membuat informasi yang sangat berguna bagi sebuah organisasi.  Nilai data bisa sangat mahal jika bisa dijadikan sebuah informasi  yang tepat sebagai dasar pengambilan keputusan. Pengadaan dan inventarisasi data merupakan salah satu hal yang perlu diperhatikan khususnya bidang logistic dalams ebuah organisasi.  Oleh karena itu diperlukan suatu sistem dengan menggunakan metode tertentu yang dapat mendukung  pengelolaan data pengadaan barang dan juga dapat membantu para manajer mengambil keputusan dalam melakukan control terhadap  persediaan.  Berdasarkan hal tersebut maka dapat dikembangkan sistem yang terintegrasi antara pengolahan data pengadaan dan jumlah pembelian barang  yang menerapkan metode catatan persediaan  seperti metode Classical Economic Order Quantity Model (EOQ Model)  maupun Inventory Model with Planned Shortages.  Metode yang digunakan adalah perancangan sistem untuk mendukung keputusan dalam menghitung jumlah persediaan agar menjadi optimal.  Dengan menggunakan sistem pendukung keputusan, beberapa kesalahan terkait dengan pencatatan data pada pengadaan dan ketidakakuratan dalam menentukan jumlah persediaan dapat dikurangi sehingga perusahaan dapat menghindari kerugian material.

scholarly journals ANALISIS PENGENDALIAN PERSEDIAAN BAHAN BAKU BATANG KELAPA PADA INDUSTRI MEBEL DAN BAHAN BANGUNAN (Studi Kasus Pada BLPT GMIM Kaaten Tomohon)

2018 ◽  
Vol 14 (1) ◽  
pp. 1
Author(s):  
Kevin Lentin Montolalu ◽  
Noortje M. Benu ◽  
Lyndon R.J. Pangemanan
Keyword(s):  
Raw Materials ◽  
Secondary Data ◽  
Control Policy ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Primary Data ◽  
Order Quantity ◽  
Analysis Method ◽  
Inventory Cost

This study aims to analyze the inventory of coconut raw materials on funiture industry and materals building in BLPT GMIM Kaaten Tomohon. This research was conducted for three months, from June until Agugust 2017. The data used in this research is primary data and secondary data. Primary data was obtained through interviews to company managers, while secondary data was obtained from data that has been compiled in the from of documents from the company, literature and internet. The data is processed using EOQ (Economic Order Quantity) method. Result showed that the control policy of raw material inventory in BLPT GMIM Kaaten Tomohon has not been efficient, it is indicated by the company’s inventory cost is bigger than the result of EOQ analysis method.*lrr*

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