Open AccessControlling sugar raw material supplies in the bottled beverage industry
Author(s) -
W Willyanto,
Anita Christine Sembiring,
Adhitya Pitara Sanjaya
Publication year - 2019
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1402/2/022045
Subject(s) - economic order quantity , raw material , procurement , inventory cost , holding cost , total cost , order (exchange) , finished good , operations management , operations research , production (economics) , business , economics , mathematics , chemistry , microeconomics , supply chain , organic chemistry , finance , marketing
The right inventory of raw materials will minimize optimal inventory costs. A company that produces bottled beverages in Medan has problems in procuring raw materials, especially sugar, which results in high inventory costs. Therefore, this study will calculate the order of requests using the Economic Order Quantity (EOQ), Period Order Quantity (POQ), and Min-Max. The EOQ method was chosen because it saves storage costs and ordering costs. The data analysis technique in EOQ method is calculating the optimal amount of raw material purchases, the optimal ordering frequency, the message costs, optimal cost savings and total cost of raw material inventory. EOQ method turned out to have a lower total inventory cost compared to the cost of procurement of raw material supplies set by the company, which is Rp. 215.862.536 while the EOQ method is Rp. 210.777.546. From the calculation results, the EOQ method is more efficient, because the company will be able to minimize the total inventory cost of Rp. 5.084.990 or 2,4% lower.