OPTIMIZING INVENTORY MANAGEMENT USING THE EOQ MODEL: CASE STUDY IN ONE OF THE BANKS IN INDONESIA
Efficient inventory management is a critical component for maintaining operational excellence, particularly within the banking sector, where stockouts or overstock situations can disrupt workflows and impact service quality. This research focuses on analyzing and optimizing the inventory management...
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| Format: | Theses |
| Language: | Indonesia |
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| Online Access: | https://digilib.itb.ac.id/gdl/view/87220 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Efficient inventory management is a critical component for maintaining operational excellence, particularly within the banking sector, where stockouts or overstock situations can disrupt workflows and impact service quality. This research focuses on analyzing and optimizing the inventory management practices at a Banking company, utilizing the Economic Order Quantity (EOQ) model to address challenges in managing office stationery items stored at the central warehouse. By examining historical data from January to October 2024, this study identifies patterns in overstock and understock scenarios and proposes practical solutions to mitigate these issues.
The findings highlight that 27% of items are overstocked, leading to increased holding costs, while understocked items disrupt operational efficiency and service delivery. The EOQ model, supplemented with safety stock and reorder point calculations, provides a systematic approach to balance inventory levels, minimize costs, and improve availability. This research also employs Root Cause Analysis (RCA) to identify underlying factors contributing to inventory imbalances, such as inefficient procurement processes, manual inventory tracking, and limited warehouse capacity.
Based on these insights, recommendations include implementing an automated inventory system, optimizing procurement lead times, and adopting inventory redistribution strategies. These solutions aim to enhance inventory accuracy, reduce costs, and ensure seamless operations across branches. This research contributes to the body of knowledge on inventory management within the banking sector and offers actionable strategies for organizations facing similar challenges.
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