ANALYSIS OF INVENTORY MANAGEMENT AT PT LAKSANA ABADI MANDIRI

• Main Author: Adlina Bunyamin, Sabrina
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85775
• Institution: Institut Teknologi Bandung

PT Laksana Abadi Mandiri is one of the distributors of medical equipment in Bandung, Indonesia. One of the problems it is facing is inventory management regarding understocking and overstocking. The company is not using any method for their inventory managamenet. This research aims to find the most cost-effective inventory control methodology in this company by comparing two widely known approaches: Economic Order Quantity and Just-In-Time. It will also be explaining the most accurate methods of demand forecasting to help the company improve its inventory management. This research will review the literature on some of the main concepts in inventory management: holding costs, ordering costs, and setup costs. The EOQ and JIT methods are reviewed in some detail based on their respective advantages and disadvantages. The EOQ model attempts to find an optimal order quantity that would minimize the total cost of ordering and holding inventory. Whereas the EOQ could assist a company in sustaining a continuous supply of merchandise, it might also lead to increased levels of inventory, as goods would be ordered based on forecasted demand. In the JIT system, the inventory level is low since goods are ordered only when they are actually needed for production or to meet demand. This will decrease the costs associated with holding excess inventory, but may make it more susceptible to stockouts and higher shipping costs in the case of any supply chain disruptions. The various techniques to be discussed in the research include methods of inventory control and demand forecasting, such as moving averages and exponential smoothing. With demand forecasting, proper and correct estimates enable a company to better predict the actual stocks that a customer will require, thus adjusting its level of inventory to this expectation. It will, therefore, be possible to reduce the possibility of understocking and overstocking by finding the most accurate method of forecasting for PT Laksana Abadi Mandiri. The outcomes of this research will provide PT Laksana Abadi Mandiri has actionable insights on how it can improve overall performance in supply chain management, reduce errors, and enhance forecast accuracy for inventory. In that way, the company will be in a position to make the issue of the availability of medical equipment a reality while minimizing excess inventory and associated costs. The study will analyze the cost efficiency of the JIT and EOQ methods for PT. Laksana Abadi Mandiri, as well as evaluate different time-series forecasting techniques to determine the most accurate approach for predicting demand. The results are expected to help the company optimize its inventory management practices and better meet customer needs in the rapidly growing Indonesian healthcare market. This research will be directed to undergird and build upon the way PT Laksana Abadi Mandiri must adopt in further improving its inventory management system. Through applying the strategies recommended, it is better placed to further enhance operational efficiencies, meet customers' needs in a better way, thereby ensuring its continued success in the competitive growing Indonesian healthcare market. The findings from this study will provide the company with a sound basis on which appropriate decisions can be forthcoming in inventory management, thereby making the supply chain operation effective and efficient.