Open AccessAnalysis of Raw Material Ordering with Economic Order Quantity Method
Author(s) -
Hani Irmayanti
Publication year - 2019
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/662/3/032011
Subject(s) - raw material , economic order quantity , economic shortage , production (economics) , order (exchange) , total cost , production cost , operations management , economics , business , supply chain , engineering , microeconomics , chemistry , mechanical engineering , linguistics , philosophy , organic chemistry , finance , marketing , government (linguistics)
The objective of this study is to create more recommendations and purchases of raw material in each period. This research method used Economic Order Quantity (EOQ) method. This method is one of many methods for supply management, to avoid shortage or surplus raw material which used for production. This study result the number of ideal raw material amount which use for production. The result was gained from the calculation of ordering and storage cost, where the ordering cost is a cost per one order and storage cost is a cost for each unit material per period. Other than that, this method also determine a forecasting based on total amount of the order that would be produced. Certainly, the result of forecasting is very helpful for the company to order raw material which corresponding to the production, so that could decrease the loss of ordering and storage cost due to the excess purchase of these raw materials.