Open AccessThe Design of Product Inventory Strategy with System Thinking and Economic Order Quantity Method Approach (Case Study: PT. Y)
Author(s) -
Raihan Dara Lufika
Publication year - 2020
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 - 10.1088/1742-6596/1569/2/022099
Subject(s) - economic order quantity , safety stock , order (exchange) , supply chain , operations research , inventory control , product (mathematics) , computer science , stock (firearms) , inventory management , inventory theory , perpetual inventory , operations management , business , economics , mathematics , engineering , marketing , mechanical engineering , geometry , finance
The global supply chain allows companies to distribute their product all around the globe. The companies have to prepare themselves with an integrated system that is involving the possibility to deliver the product to the farthest area within their regional target. However, the limited due date of products generates the distribution and inventory problem that is complex and challenging to solve. One of the methods to solve the distribution problem of products with the due date is to use the system thinking approach to identify the root of the problem. The Economic Order Quantity (EOQ) method is the most reliable method to discover the most cost-effective strategy, especially for products with the limited due date. The company for this case study is PT Y. The main problem of the company is stock out. The result shows the root of the problem in this company is the unstable demand from the customer, storage management, and distribution management. There are similarities between the three root problems. The due date and quantity are the factors that control the three root problems. The result also shows that the EOQ Model that is taking the due date into account is more expensive than regular EOQ model.