PROPOSED INVENTORY REPLENISHMENT MODEL TO OPTIMIZE INVENTORY LEVEL PT. XYZ

• Main Author: Fahlevi Muharram - Nim: 29115629 , Dzulfikar
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/26824
• Institution: Institut Teknologi Bandung

<p align="justify">PT. XYZ Indonesia, operates as a subsidiary of ABC Inc., is moving in consumer goods industry. In festive season 2017 (May, June and July), the company suffered the losses up to IDR 9 billion. One of the issue is stock out occurrence of CC inventories which is the main material in producing the product. As the effect of stock out, holding cost leaped significantly to level IDR 5 billion far above from IDR 1.8 billion as company target. Therefore, a depth analysis is needed to prevent the stock out and reduce the holding cost. Issue exploration is started by collecting data and analyzing the current condition such as company logistic model, warehouse capacity, replenishment policy and CC inventories. Quantitative data, mostly sourced on Rough Cut Capacity Planning, is provided to support business issue, while qualitative data is obtained by conducting the personal interview to related stakeholder. By performing current reality tree, all of these data are connected by causality relationship to obtain the root cause. It is concluded that the existing replenishment policy is not compatible to overcome the issues. Three replenishment models are proposed which are modified EOQ, modified fixed-time order and dynamic lot size. EOQ and fixed-time model are modified to deal with capacity constraint. While dynamic lot size is able to handle the variability in demand, holding and order cost that can’t be handled by other proposed models. To get the representation of inventory level and holding cost in 2018, simulations are performed. As the result, all of proposed models are able to prevent the stock out by maintaining its inventory level without affecting safety inventory. Decision making is determined by lowest holding cost which is given by dynamic lot size model. Last, implementation plan will be presented to accommodate the company implementing the selected proposed model. <p align="justify">