DETERMINING INVENTORY POLICY FOR SPARE PART WITH INTERMITTENT DEMAND

• Main Author: MUHAMMAD, NAUFAL
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46786
• Institution: Institut Teknologi Bandung

In a production site of PT X, a company that works in exploration & production of oil & gas, had a problem of underproduction. According to investigation by the company, it is determined that the problem happened due to downtime in production caused by shortage of spare part for maintenance. Through root cause analysis, it’s determined that the root cause is lack of systematic inventory control, which is inventory policy. So, to resolve the problem, a set of inventory policy is proposed. The research started by classifying materials by SBC classification and ABC analysis to choose material to be the focus of the research. It is obtained 82 materials to propose inventory policy by (s,S) model. To determine the parameter of the inventory policy, demand forecasting is done to obtain the lead time demand distribution. The lead time demand distribution is used to determine (Q,R) inventory policy model to approximate the parameter of (s,S) model using two approaches, those are cost approach and service level approach. The resulted inventory policy is simulated based on historical demand to determine the performance by three criteria, that is cost, service level, and inventory turnover ratio. According to comparison result, it is concluded that the inventory policy based on service level approach gives a better result. It is determined the inventory policy could improve service level from 89% to 96% and inventory turnover ratio from 0.47 to 2.20.