IMPLEMENTATION OF SINGLE ORDER INVENTORY MODEL IN KLP CONCEPT STORE

• Main Author: Lisanputera (19015095), Kenny
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/28418
• Institution: Institut Teknologi Bandung

KLP is a concept store that sells many variants model of perishable items. Perishable items purchased once per period and have lead time to arrive, so KLP must maintain the items’ stock to prevent understock and overstock that cause excessive cost. KLP often suffer understocking and overstocking situation that indicate by lot of items sold with discount after the end of items’ period and customer cannot find the items they want. These problems occur because there’s no inventory management in KLP and the purchasing done by owner’s intuition. <br /> <br /> To solve the problem, this research used Single Order Inventory Model that presented by (Chopra & Meindl, 2013) and calculate only Class A items based on ABC analysis. Since this model needs information such as demand characteristic (demand’s average and standard deviation), price, cost (cost of goods sold and order cost), discount percentage, and holding cost, so this research used 2017 sales data and interview KLP owner to get the information, afterward this model will inform demand that could be fulfilled in terms of cycle service level (CSL). <br /> <br /> Based on analysis, several KLP items’ demand is very fluctuate since the standard deviation is bigger than average demand. By this condition, this inventory model informs optimum quantity order for each item according to CSL and demand characteristics, then it informs expected profit will be gained with the risk of understock and overstock. <br /> <br /> This research also used sensitivity analysis to analyze the impact of changing independent variables (CSL and demand standard deviation) to dependent variables (expected profit, understock, overstock). The result shows this model is sensitive since the changing of independent variables change the result. Increasing and decreasing CSL with same standard deviation will lower the expected profit, increasing overstock and decreasing understock when CSL increase, and vice versa. Lower demand standard deviation with same CSL will increase expected profit, lowering both overstock and understock, and vice versa. <br /> <br /> This inventory model is useful for KLP as a purchasing guidance of similar items with assumption have similar demand characteristic and sorting out which items that profitable for KLP based on expected profit. KLP could gain more profit with lowering demand’s standard deviation by improving data record precision, making marketing strategy to maintain the demand, reduce items’ model variant and use pre-order selling strategy.