Raw Material Inventory Control calcium carbonate with a

Raw Material Inventory Control calcium carbonate with a method Economic
Order Quantity (EOQ)
Etty Nainggolan1)
Advisor: Muhammad Kholil, MT1)
Faculty of Engineering Mercu Buana University
Departement of Industrial Engineering Mercu Buana University
Email : etty.nainggolan@gmail.com
Inventory is something important for the smooth operational processes. Fulfillment process inventory of raw materials, particularly
calcium carbonate (CaCO3) in barn POM Baras, PT Unggul Widya Teknologi Lestari which many broken and scattered sacks warehouse
floor. Wastage of raw materials caused by two factors: internal and external.
Method is Economic Order Quantity (EOQ) with the aim of determining the optimal amount of purchases which can certainly reduce the
cost of the message (Order Cost) and cost savings (Holding Cost). Based on the calculation method EOQ, it can then proceed to determine
the reorder point (ROP), which is based on the amount of safety stock and lead time in ordering, so the inventory in the warehouse is still
able to support the production process.
The results obtained from the use EOQ method optimal order quantity as much as 81 206 kg, with a point backorders (ROP) is as
much as 42 228 kg and 18 690 kg as much safety stock at a total cost (TIC) of Rp 30,916,912, -. This fee is more cost-effective than ever
before. The resulting cost difference before calculating the EOQ method is Rp 58,368,428, - the actual costs of the company as much as
Rp 89.285.340,-. So this is supposed to be the difference in cost can be saved by the company in controlling inventory costs of raw
materials, especially calcium carbonate (CaCO3).
Keywords: Inventory, Calcium carbonate (CaCO3), EOQ, ROP
1.1 Scofe of Problem
In this issue the author only limits on procurement
issues, receipts and material control Calcium carbonate (CaCO3)
in barn Palm Oil Mill (POM) Baras, PT Unggul Widya Teknologi
Lestari.Metode Economic Order Quantity (EOQ).
PT Unggul Widya Teknologi Lestari is a private-owned
enterprises engaged in the processing of palm oil into Crude Palm
Oil (CPO) and Palm kernel (PK). PT Unggul Widya Teknologi
Lestari is an industry that produces the use of equipment /
machinery in melaksanan production activities. Smooth
production process is a key demand that must be met in order for
the target company can be reached.
In a production process to consider several things including
how to increase production capacity, planning and inventory
control. One of the factors that support the production is the
availability of raw materials. In addition to fresh fruit bunches
(FFB) as the main raw material, In the manufacture of Crude
Palm Oil (CPO) and Palm Kernel (PK) other raw material that is
needed Calcium carbonate (CaCO3). Calcium carbonate
(CaCO3) is a chemical that is very necessary to supplement the
nutrients that are in Crude Palm Oil (CPO) and Palm Kernel
Weakness in raw material inventory control, can either
causes damage to the material stored. It is experienced by PT
Unggul Widya Teknologi Lestari, where frequent damage and
material loss on inventory in the warehouse, namely Calcium
carbonate (CaCO3), while acceptance of orders from the
manufacturer / supplier. In the procurement process is not
considered optimal so that still needs a reference in order to
obtain optimal inventory to reduce costs and damage to the
inventory disimpa
Therefore, a need for a study on a PT Unggul Widya
Teknologi Lestari to determine the optimal purchase level, in
order to reduce damage to the inventory of materials by
considering the costs and the cost of store that message in the
Inventory Calcium carbonate (CaCO3) with Method Using
Economic Order Quantity ( EOQ).
1.2 Purpose
The goals to be achieved from this study are:
1. To determine the optimum quantity of orders in every
purchase of raw materials (Economic Order Quantity)
2. To determine the reorder point in time (Reorder Point).
3. To determine the total cost of inventories of raw materials
(Total Inventory Cost) to avoid the risk of excess and ran
out of raw materials so as to minimize inventory costs for
1.3 benefit
The benefits derived from the results of this study are:
1. Can knowing the effective time of booking with the optimal
number of reservations to reduce the costs that too often.
2. Avoiding the risk of running out and the excess raw
materials and minimize losses on the cost of the message
and save costs.
3. Can know the amount of safety stock (safety stock) in
warehouses in order to avoid a shortage of raw materials
4. Can determine the maximum inventory (Maximum
Inventory) so that the cost of the supplies are not excessive
and wasteful.
According Heizer and Render (2005: 68) is one of the
techniques of inventory control of the oldest and widely
renowned, inventory control method is to answer two (2)
important questions, when to order and how much should be
Meanwhile, According to Fahmi (2012), EOQ is a
volume or number of the most economical purchases to be carried
out every time you make a purchase. To meet the needs, it can be
taken into account fulfillment (purchase) the most economical
that a number of items that will be obtained with the purchase of
the mennggunakan minimal cost.
Another opinion of Handoko (2008), the model
Economic Order Quantity (EOQ) or Economic Lot Size (ELS) is
one of the techniques of inventory control the oldest and most
widely known. This model can be used both for goods purchased
or produced yourself. EOQ model is the name used for the goods
purchased, while ELS used for goods that are produced.
According Heizer and Render, in Rifa'I (2011), this model is easy
to use, but should be able to meet some assumptions like:
1. Demand is known, fixed and free.
2. The wait time is the time between ordering and
receiving orders known and constant.
3. Acceptance of inventory is instantaneous and fully
completed. In other words, the inventory of an order
comes in one group at a time.
4. Not available quantity discounts.
5. The variable cost is only the cost to prepare or make a
reservation (charge adjustment) and the cost of storing
inventory in a certain time (charge storage or carrying).
6. Running out of stock (shortage) can be completely
avoided if the booking is done at the right time.
With these assumptions, graphs usage over time can be seen in
Figure 2.1
2.1 Production Process
The process is a means, methods and techniques of the
real sources exist modified to obtain a result. While production is
an activity to create or add to the usefulness of a product or
service. From the description above, the production process can
be interpreted as a means, methods or techniques to create or add
to the usefulness of goods or services by using existing resources.
Palm oil is an important source of vegetable oil in
addition to beans, corn and so on. Palm oil used comes from the
flesh of the fruit (misocrap) and from palm kernel (endosperm).
In addition to producing oil from palm kernel, the result of the
process is the fruit of the oil palm empty fruit bunches can be
used as fertilizer diabukan and potassium, cengkang which can
be processed into charcoal for pavers in the garden, pulp and fiber
can be used for boiler fuel.
2.2 Inventory
According Rangkuti (2004: 1) inventory is an asset
which include goods belonging to the company with the intent to
sell within a period specified business or stock of goods which
are still under construction or production process, raw materials
inventory or awaiting use in a production process
Meanwhile, According to Schroeder (1995: 4) inventory
or inventory is the stock of material used to facilitate the
production or to satisfy customer demand. Some authors define
preparations as an idle resource of various types that have
potential economic value. This definition allows one to assume
the equipment or workers who are unemployed as a preparation,
but we consider all of the resources are idle capacity other than
as a material.
2.3 Inventory of Calcium Carbonat (CaCO3)
Inventories of raw materials Calcium carbonate
(CaCO3) is needed in the processing of oil palm fruit, because it
is used to separate the shell and palm kernel broke a large and
weighs about the same in claybath machine. According Saryono,
et al (2008), the separation process is based on differences in
specific gravity.
The kernel has a specific gravity lighter than the CaCO3
solution, while its density larger shells. Kernel-nyai mempu wet
density of 1:07 with a heavy shell of its kind 1.30. Then to
separate the kernel and shell made solution with a specific gravity
of 1.12 in water at claybath mixed with calcium carbonate
Results of palm kernel separation will float and into
Vibratting Screen Kernel, while the broken shells will sink and
into Vibratting Screen Shell. Palm kernel kernel will be taken to
a silo through a wet and wet conveyor kernel kernel kernel
elevators and top wet conveyor towards kernel silo. While the
broken shells will be taken to the shell using a wet shell conveyor
Persediaan Rata-rata
Figure 2.1 Use of Inventory Over Time For EOQ model.
Figure 1.1 shows the Q * which is the quantity of
products ordered. In general, inventory levels increased from 0 to
Q * when the order arrives. Because of the level of demand
constant over time, inventories declined at the same rate all the
time. When the inventory level reaches 0, new orders made and
received, and inventory levels rose again to Q * units. This
process happens all the time.
Optimal ordering quantity is calculated by analyzing the
total cost. According Sakkung (2011) explained that the total cost
(TIC) in a period is the sum of the fees plus the cost of storage
for a certain period.
Storage costs per year: (Q *) / 2 x Cc
Booking fee per year: D / (Q *) x Cs
Thus the total cost per year (TIC):
TIC: (Q *) / 2 x Cc + D / (Q *) x Cs
So the cost is a function of the quantity of ordering. The
minimum total cost occurs when two components of booking fees
2.4 Economic Order Quantity (EOQ)
Each company must always try our best to determine the
basic material inventory procurement policy that is appropriate,
in order not to interrupt the production process and the costs
incurred are not too high. For this purpose there is a model of
Economic Order Quantity (EOQ).
and storage costs intersect at one point shown in Figure 2.2 Based
on these calculations, then we can know that the optimal order
quantity Q * are as follows (Rifa'I, 2011):
(Q *) / 2 x Cc = D / (Q *) x Cs
Thus, the EOQ formula used is:
Q *= √ ((2 .D.Cs) / Cc)
D : expected demand per period
Cs: booking fee per booking
Cc: storage cost per unit per year
Q *: optimal order quantity
D / Q: the number of reservations during the year
Q * / 2: Average inventory
raw material can be replaced with a new one. Safety stock can be
calculated by the following formula (Rangkuti in Ruauw, 2011):
Safety Stock = Z.q
q = √ (〖(€ x-y)〗 ^ 2 / n)
Z: Standard deviation
q: Squares error
X: The use of raw materials senyatanya
Y: Estimated use of raw materials
Reordering (Reorder point).
Reorder point is the time or a certain time the company must hold
a re-ordering of raw materials, so as the arrival of the proper
ordering the expiration of purchased raw materials, in particular
with EOQ method. Accuracy in the calculation of the time to be
really taken into account, because if a booking is outdated or too
late of the time it will increase the cost of purchasing raw
materials or stock out cost (SOC), if too early will need more
storage charge early or carrying extra cost (ECC). ROP
calculation (Reorder point) can be calculated by the formula
(Erlina, 2000):
ROP = (LD X AU) + SS
ROP: Order back
LD: Lead Time
AU: Average Usage / average consumption
SS: Safety Stock
Determination of the maximum inventory (Maximum Inventory).
The maximum inventory required for warehouse inventory
planning is not excessive so as to avoid waste of work. Maximum
Inventory can be calculated using the formula (Pamungkas,
Maximum Inventory = SS + EOQ
SS: Supplies safety
EOQ: Quantity optimal purchase.
Calculation of Total Cost of Raw Material Inventory (TIC).
To determine the total cost of inventories of raw materials
required minimum company using EOQ calculation. TIC
calculation is as follows:
TIC = (Q *) / 2 x Cc + D / (Q *) x Cs
D: expected demand per period
Cs: booking fee per booking
Cc: storage cost per unit per year
Q *: optimal order quantity
Cost Efficiency
According Robianto, et al (2013) to calculate the inventory cost
is the cost efficiency achieved before deducting expenses after
the holding of effective inventory analysis.
Efficiency Cost = TIC before EOQ - TIC after EOQ.
TIC: Total Cost of Inventory
EOQ: The amount of the purchase economical.
Booking fee per year will decrease if the order quantity
is increasing, but the storage costs would increase if the order
quantity is increasing because the average amount of inventory
that must be kept more.
According Ahyari (1995: 163) in Eyverson Ruauw (2012) in
order to achieve the objectives in minimize costs, the company
must meet a number of factors about the supply of raw materials.
The factors are:
Estimated usage.
Before conducting purchases carried out, it is necessary to make
estimates pemakaiaan raw materials to be used in the production
process at a certain period.
The price of the material.
The price of raw materials to be purchased to be one of the
deciding factors in the inventory policy as well as the basis for
how much funding should be provided for investment in the
supply of raw materials.
Inventory costs.
The costs for conducting inventories of raw materials has been
properly taken into account in determining the amount of raw
material inventory. The costs for these supplies include:
Storage costs (holding cost / carrying cost). Storage costs can be
expressed in two forms, namely as a percentage of the average
value of inventory / year and in the form of dollars / year / unit
Booking fee or purchase (ordering cost / procurement costs).
Actual usage.
Actual use of raw materials from inventory ago (actual demand)
is a factor that needs to be considered as to the purposes of the
production process will be used as one of the basic considerations
in the procurement of raw materials in the next period.
The waiting time (Lead time).
The waiting time (Lead time) is used the waiting time (that
happens) between the time of ordering raw materials up to the
arrival of raw materials tersebbut. This waiting time requires
more attention because it is very closely related to the current
penetuaan reordering (reorder point).
Model material purchase.
Companies must be able to determine the most within their
purchasing models to the situation of raw materials purchased.
Model optimal purchase or Economic Order Quantity (EOQ).
Supplies of safety (safety Stock).
According to (Ahyari, 1992) in Sari (2010), Safety stock is a
stock that is reserved as a security of continuity of the production
process of the company. The total amount of safety stock certain
number of units, where this amount will be retained, even if the
3.1 Method Of Collecting Data
In collecting the data contained in this writing system
based on the conduct of the study, how the method used by the
author in data collection, namely:
a. Observation method
This method is a technique of collecting data by observation and
practice of on-site activities.
With observations and accompanied by practice, it is expected that
the level of understanding in data collection can be more effective.
b. Methods Interview / Interview
This method is done to obtain data by direct interviews with
company employees to obtain data about the general picture
persahaan, the things that affect the supply of raw materials and the
receipt of raw materials.
c. Study Of Literature
To strengthen and broaden the basis of reasoning before
researchers went into the field and doing some research, the
investigator must be equipped with enough knowledge to problems
as well as goals to be achieved from a study. Literature study was
realized in the theoretical basis to support for analyzing the data
that has been acquired and resolve problems that arise as a
reference to determine the stage of problem solving.
3.3 Framework
Problem-solving framework is needed to provide an overview
systematics used in answering the research problems. For more
details about the stages or methods in this study can be seen in the
following figure:
3.2 Analysis and Data Processing
Data and information gathered is then processed using a simple
mathematical model calculations supported using data tabulation /
form of tables, and presented in a Report Writing Final.
Based on the data results of studies and other supporting data that
has been processed can be the basis for the preparation of
Assessment Report. Besides the data collected are also used to be
a reference in determining the procedures for determination of
good transportation planning and inventory management effective
and efficient. Criteria for data analysis can be seen as follows:
a. Formulate problems relating to the evaluation of
transportation and inventory management.
b. Identify the cause of the problems in the evaluation of freight
transport of raw materials and inventory management.
c. Together Mill Manager, Assistant Chief, Assiten and Head of
Section / KTU determining control strategies freight transport
of raw materials and inventory management.
d. Policy-making on the strategy undertaken and controlling the
execution of the work.
e. To monitor the results of implementation of the work.
Table 4.1. Purchasing and spending Calcium carbonate
4.1 In the table below, it can be seen that the procurement
process is still not optimal because the procurement process is
repeated up to two times in a month with a small amount-less,
whereas the expenditure is quite large and also a lot of problems
that occur.
In Table 4.1, it can be seen that the procurement process
is still not optimal because:
1. In January the process of spending large enough to reach
32,000 kg, while the procurement process is carried out twice
with the amount of 19,500 kg and 17,500 kg. This will
certainly add to the cost of the message.
2. In the month of February the purchase amount is too much, the
purchase of as many as 21,500 kg, while its use is only 16,000
kg. This will result in increased cost savings (holding cost).
3. In April the number of purchases too little use is only 11,500
kg, while 22,000 kg. It is of course also can result in a shortage
of raw materials for the production process. While in the
procurement executed two times of that number 2,500 Kg and
9,000 Kg, of course, can also affect the cost of the message
(ordering cost).
4. In April also occur as much damage as heavy sacks 13 @ 50
Kg or 650 Kg could not diterimakan.
5. In June there were damaged as many as 20 sacks Sacks weight
@ 50 Kg or 1,000 Kg / 1 Ton unacceptable.
Seeing from the consequences of this problem, of course,
there needs to be an improvement schedule for the procurement
of raw materials Calcium carbonate (CaCO3) which is either a
course on the optimal number of reservations that posed no major
expenses beyond.
Material Calcium carbonate (CaCO3) is booked per
bag / package turned out amount does not reach 50 Kg. In this
study, the weighing is carried out on 15 sacks as a sample.
Samples taken are of good condition to which the packaging is
damaged / perforated deserved warehouse. Weighing results
Calcium carbonate turned out sacks (CaCO3) is still good
condition was already reduced in number, and jumlahnyapun
vary from at least as many as 46 kg and the most numerous as
much as 49 kg. While the packaging is perforated highest
weight of only 46 kg and the lowest is 38 Kg.
4.1 data processing
Losses of transport because the purchase is not
optimal, because the material slightly loose so the space vehicle
combined with spare parts.
a. weight loss
As a result of all the existing problems cause many to lose the
calcium carbonate (CaCO3) are packed. In the delivery of
Calcium carbonate (CaCO3) per sack / packaging weighs @ 50
Kg, but once weighed turned out there were not in line with
expectations when booking. The weighing process can be seen
in Figure 4.1
Of the weighing results obtained an average weight of
perkarung that only weighs 45 kg, and that means companies
perkarungnya lose 5 Kg.
a. Losses time of admission
From the procurement process conducted eight times (Table
4.2) as much damage has been done twice, in the delivery on 18
April 2013 Number Purchase Order (PO) UWTL / BM1 / PO /
12/12/0878 as many as 2500 Kg sack and UWTL / RB1 / PO /
03/13/0270 as much as 9000 kg there is damage as much as 13
sacks (13 sacks X @ 50 Kg = 650 Kg) can not diterimakan.
Then on June 8, 2013 with the acceptance of the PO Number
UWTL / BM1 / PO / O5 / 13/0520 there were 20 sacks (20
sacks X @ 50 Kg = 1,000 Kg or 1 Ton) can not diterimakan
because the sack was damaged and its contents have been
scattered and not whole again.Tabel 4.3 Penerimaan Pengadaan
Calcium Carbonat (CaCO3).
Figure 4.1 Weighing Calcium carbonate (CaCO3).
In the weighing is done on Calcium carbonate (CaCO3) in good
condition and perforated / damaged that they are received in
warehouse. Weighing results can be seen in Table 4.2
Table 4.2 Results of Scales Calcium carbonate (CaCO3).
From table 4.3 above can be detailed scale level of losses
incurred by PT Unggul Widya Teknologi Lestari is as follows:
Acceptance = Total Purchase – Damage
Loss = Number of sacks x average loss
Received = Total Purchase - (Loss + Damage)
For example, the purchase in January with No. TR UWTL /
BM1 / TR / 01/13/0047 acquisition of 19.500 Kg or 390 sacks.
Loss = 390 X 5
= 1.950 Kg
Received = 19500-1950 = 17 550 Kg.
From the results of these calculations (in Annex 4.1), can be
determined as a whole the number of good number of
purchases, the amount of damage, and the amount of material
lost Calcium carbonate (CaCO3). After knowing the amount,
can dilanjukan to calculate the level of losses suffered by the PT
UWTL. Here are the calculations.
1.Total Purchase.
The total purchase price is the sum of all purchases from
January to July were conducted at PT Unggul Widya Teknologi
Total Purchases = Purchases Purchase A + C + ......
= 19,500 + 17,500 + 21,500 + 19,500 + 2,500 + 9,000 + 18,500
+ 16,500
= 124,500 Kg or 2,490 Sacks
2.Total Damage (Not Acceptable).
At pambelian damage occurs only happened in April and July,
respectively number 13 sacks and 20 sacks Calcium carbonate
(CaCO3), each of which weighs 50 Kg.
Total Damage (not acceptable) = Damage Damage A + B + ...
= 650 + 1.000
= 1.650 Kg
units ordered inversely proportional to the frequency of booking.
If the number of units ordered enlarged the ordering frequency
will be reduced. Conversely, if the unit is ordered reduced the
frequency of the reservation will be increased. To obtain the
optimal level of fees, the estimated value will be obtained at the
point of balance with the cost of storage.
1. The cost of the message is the cost incurred by the company in
the procurement process, these costs can include:
a. Employee wage costs, the costs for the ordering process and
material handling when received from the supplier. According to
the magnitude of the Provincial Minimum Wage (UMP) in the
province of West Sulawesi in 2013 was Rp 1.165 million per
month. This process is carried out by three employees: one
person part of the purchase, and the two parts warehouse.
Wages = Provincial Minimum Wage (UMP) X 3 People
= Rp 1.165 million X 3 People = US $ 3.495 million, - ... ... .........
b. Pemesanaan costs, in this case the booking is done by clicking
use the phone to contact the buyers and suppliers in the process
of coordinating the transporter in an effort to control the delivery
of as much as Rp 500.000, - ... ... .................. ....... .................. (2)
c. The cost of shipping documents to send evidence usually PO
(Purchase Order), letters, and so on to facilitate the ordering
process is as much as: Rp 250.000, - ........................ .. ...... .. (3)
The results of the cost assumptions details of bookings made by
PT UWTL can be seen in Table 5.1
Table 5.1 Booking Fee Calcium carbonate (CaCO3).
3.Total Loss.
The total loss, a loss that is not directly felt by the PT UWTL
because in the process of receiving Calcium carbonate (CaCO3)
do not do the weighing. So the company suffered a loss of:
Total loss = Loss Loss A + B + C + Loss ...
= 1.950 + 1.750 + 2.150 + 1.950 + 250 + 835 + 1850
+ 1550
= 12 285 245.70 246 Kg
This is a purchase amount that should be received by the
company where the amount of the purchase is reduced by the
amount of damage and the amount of loss of Calcium carbonate
(CaCO3) which is not recognized by the company.
Total received = Acceptance Acceptance A + B + C +
Reception ...
= 17,550 + 15,750 + 19,350 + 17,550 + 2,250 +
7,515 + 16,650 + 13,950
= 110 565 kg or 2,211 2211.3 Sacks
From the results of these calculations can be seen in table 4.4,
diaman number of purchases, the amount of material that is
damaged, the amount of material loss suffered by the company
and the amount actually received by the PT Unggul Widya
Teknologi Lestari. Where this is the case from January to June
If dirupiahkan, losses due to the cost of damage and loss of
material Calcium carbonate (CaCO3) is equal to:
Losses (Rp) = price of goods X (Total Damage + Total Loss)
X = Rp 1,330 (1,650 + 12,285) = Rp 18.53355 , -
Biaya simpan (Holding Cost).
Biaya ini mencakup biaya modal, biaya pemanasan ruangan,
pendinginan ruang penyimpanan, biaya penerangan, keamanan,
sewa gudang, biaya kerusakan dan penyusutan, biaya asuransi,
biaya admnistrasi dan pemindahan, dll. Namun biaya
penyimpanan umumnya dihitung dengan persen tertentu dari
terhadap nilai persediaan barang 20% - 35%, (Pujawan,2010).
Berdasarkan literature tersebut, untuk asumsi biaya penyimpanan
Asumsi Biaya Simpan
= 20 % dari nilai harga material
barang= 20 % x 1.330 = Rp 266,- / Kg
Biaya setiap Kilogram (Kg) Calcium Carbonat (CaCO3) adalah
Rp 2,66,- berarti dalam satu karung (@50 Kg) Calcium Carbonat
(CaCO3) biaya simpannya adalah sebesar Rp 13.300,-.
5.2 Actual costs Company
This cost calculation is a cost to be borne by the company, during
the process of inventory control which of course if it is not
managed properly, it will cause huge losses. Here are the costs
and the losses suffered by the company of the procurement
process Calcium carbonate (CaCO3).
1. Cost Book (Order Cost).
Based on the large number of number Purchase Order (PO) and
Transfer In (TR) procurement process undertaken by the
company from January to June are as many as 8 times.
Booking fee = 8 X Rp 4.245 million
5.1 Analysis and Discussion
Efforts to meet the basic needs of the inventory can not
be separated from the costs were very high and the effect on the
burden for companies. In connection with it, to save on the cost
of the booking, the company must make a reservation in bulk,
which in turn will reduce the cost of the booking. The number of
EOQ (Q *) = √ ((2 .D.Cs) / Cc)
= √ ((2 X 206 610 X Rp 4.245 million) / 266)
= 81 206 ≈ 1,624 Kg Sacks
Q *: optimal order quantity
D: expected demand per period
Cs: booking fee per booking
Cc: storage cost per unit per year
= USD 33.96 million, - .. ............ .. ... ... .. (1)
2. Cost Save (Holding Cost).
Cost savings and items = 20% x Price x Number of Items Ditrima
= 20% x 1330 x 110 565
= US $ 29.41029 million, - .................................... .. (2)
3. The cost of the damage = Price x (Total items damaged + Lost)
X = Rp 1,330 (1,650 + 12,285)
= Rp 1,330 X 13 935 Kg
= US $ 18.53355 million, - ............... .. .................. ... (3)
4. Cost savings beginning of the year = 20% x Price x amount of
goods stored
= 20% x Rp 1.330 x 27 750
= USD 7.3815 million, - ..................... ... ............ ... (4)
From the calculation of the EOQ didapkan optimal
purchase amount is as much as 81 206 kg, equivalent to 1,624
sacks Calcium carbonate (CaCO3) in every time of booking.
Having in mind the number of bookings in any reservations, lived
find the frequency of purchase within one year. Looking for this
purchase frequency, can be calculated from the number of needs
in one year divided by the number of optimal purchase (EOQ).
Purchase frequency = Demand / (Q *)
= 206,610 / (81,206)
= 2.5 ≈3 Kali
Costs message = s .d / (Q *) or sx Frequency Purchases
= 4.245 million X 3
= Rp 12.735 million, So the number / frequency of purchase Calcium
carbonate (CaCO3) which is made in one year is senyak 3 times
with ordering fee is $ 12.735 million, -. This booking frequencies
less than the previous, so there is no wastage at the cost of the
After knowing the optimal order quantity and frequency of
purchase, are obliged also to know how the duration of endless
supplies of raw materials are stored so that the timing of the
subsequent purchase is certain and also as the basis for
determining the safety stock (Safety Stock) prior to the
repurchase. To determine the duration of the discharged material,
should find out how many working days in a year. Calculation of
the general number of days in a year is 364 days, and major
holidays are Sunday. The number of Sundays in a month is 4
days, or 48 days in a year. And within one working day of the
week is 6 days. So the number of working days in a year is 364
days minus 48 days, as many as 316 days.
Duration discharged material = Weekdays one year / Frequency
of purchase
= 316/3
= 105 Day
So in each time ordering material will be exhausted within a
period of 105 days diving, prior to the next pemesaan.
Having in mind all the costs incurred, all charges combined into
one. The total cost of this is that the dependents for the company.
Total cost = Cost + Cost savings + booking fee + damage
inventory costs earlier in the year
= Rp 33.96 million + US $ 29.41029 million + US $ 18.53355
million + USD 7.3815 million
= US $ 89.28534 million, -.
So the total cost of which is borne by the company is as much as
US $ 89.28534 million, - for more details see in Table 5.2
Table 5.2 Initial Cost Company before EOQ
5.3 Proposed costs by EOQ
Optimal Booking point (EOQ).
Model Economic Order Quantity (EOQ) is directed to
find the total number of orders that meet the minimum inventory
cost by considering the cost of ordering and storage costs, so
expect no shortage of supply.
Before looking for value EOQ, necessary data about the material
needs of Calcium carbonate (CaCO3) in a single year (demand).
In search of these needs, based on the average level of
consumption from January to June 2013, then multiplied for a
number of months in a year. However, if the beginning of the
year there is the amount of material stored, is not included in the
determination of the amount of demand, thus reducing the
number of the need for EOQ calculation. For more details, see
the following calculation:
Needs monthly = Average - The average expenditure of Januri
months - in May
= (32,500 + 16,000 + 18,150 + 22,000 + 9,000) / 5
= 19,530 K
Needs within 1 year (Demand) = (average Needs month x 12) Inventories beginning of the year
Demand = (19,300 x 12) - 27 750
= 206 610 Kg
So the amount of calcium carbonate (CaCO3) which is actually
needed in a year (demand) is 206 610 kg.
After know the total cost of the message, save costs, and its
demand, it can proceed with the counting EOQ. The EOQ
calculation is as follows:
5.4 Inventories Safety (Safety Stock).
Safety stock (Safety Stock) are useful to protect the
company from the risk of running out of raw materials (Stock
Out) and delays in the receipt of raw materials are ordered. With
a look and consider storage that occurs between the estimated
consumption of raw materials with actual usage can be seen that
the magnitude penyimpaan. Once known how much the standard
deviation of each - each will set the amount of storage analysis.
In the analysis penyi
This mpanan manager (management) companies determine how
much raw material is still acceptable. According Ruauw (2011),
is generally used tolerances are 5% and 5% above estimates
underestimate the value of Z is 1.65. For the calculation of
standard deviation can be seen in Table 5.3 According to section
Accounting PT UWTL (Rusno), on demand planning the
company determine the amount of need is as much as 333,333 kg
/ year or 27.777.75 Kg / Month but in ordering will been booked
27,800 Kg.
Determination of the Maximum Inventory
The maximum inventory (Maximum Inventory) is required by
the company for the amount of inventory Calcium carbonate
(CaCO3), which is not excessive in storage so there is no wastage
of working capital. The maximum amount of inventory that is:
Maximum Inventory = Safety Stock + EOQ
Maximum Inventory = 18 690 + 81 206
= 99 896 Kg.
So the maximum supply Calcium carbonate (CaCO3) that there
are as many as 99 896 kg in warehouse. For more jelanya
regarding the calculation of Economic Order Quantity (EOQ).
Table 5.3 Calculation of Standard Deviation
5.6 Calculation of Total Cost
To determine the total cost of inventories of raw
materials (TIC) minimum iperlukan company using EOQ
calculation. This is done for cost savings the company supplies.
In the calculation of TIC, the calculated cost is the cost of
messaging and storage. Of storage costs at the beginning of the
year the company had a backlog of inventory as much as 27 750
kg Calcium carbonate (CaCO3) that should also be calculated
how much it costs shelf. Calculation TIC (Total Incremental
Cost) is as follows:
Total Cost (TIC) = (Q *) / 2 x Cc + D / (Q *) x Cs
= ((81 206/2 x (20% x 1330)) + 27 750 X (20% x 1330) +
206,610 / 81,206 x 4.245 million)
= 12,735,000 + 7,381,500 + 10,800,412
= Rp 30,916,912, Description:
D: expected demand per period
Cs: booking fee per booking
Cc: storage cost per unit per year
Q *: optimal order quantity
Once known the value of Standard deviation, then resumed
looking for value squared error (q), namely:
(€ 𝑋−𝑦)2
= 11, 327
Once known the value of Standard deviation, then resumed
looking for value squared error (q), namely:
Safety Stock
= Z.q
Safety Stock
= 1,65 X 11,327
Safety Stock
= 18.690 Kg
Z : Safety Stock
q : Kuadrat eror
n : Jumlah bulan
So the amount of safety stock for Calcium carbonate (CaCO3)
before making a purchase is as much as 18 690 kg.
5.5 Reorder Point (ROP)
When reordering or Reorder Point (ROP) is when the
company must make a reservation back, so that the receipt of raw
materials that can be ordered on time. Before calculating the
ROP, the buyer must know the time it takes from the book until
the ordered goods to place the buyer (Lead Time).
Figure 5.1 is proof of booking Calcium carbonate (CaCO3) at the
last purchase in January-June 2013. By booking with PO
Number: UWTL / BM1 / PO / O5 / 13/0520 was created on May
3, 2013 and the arrival date of June 8, 2013 . That means the
length of time required (Lead Time) is for 36 days.
Figure 5.3 Cost Analysis After EOQ
So the total cost of inventories of raw materials (TIC) to
store Calcium carbonate (CaCO3) which required the company
is Rp 30,916,912, -.
(Lead Time) during booking, ROP calculation can be done. The
number of ROP:
ROP = (LD X AU) + SS
= (36 days x 206,610 / 316) + 18,690 Kg
= 23 538 + 18 690 Kg Kg
= 42 228 ≈ 845 Kg Sacks
LD: Lead time
AU: Average Usage / average consumption
SS: Safety Stock
So the point of backorders (ROP) is as much as 42 228 kg,
equivalent to 845 sacks are still in storage warehouse.
5.7 Cost efficiency
This cost efficiency is a difference in the amount of expenses
incurred before and after the calculation of EOQ EOQ
calculation. To determine the actual cost of the company and the
proposal by the Economic Order Quantity can be seen in Table
Table 5.4 Comparison of Actual Cost with Proposed Company
Based on table 5.4, it can be seen the total cost incurred
by the company is as much as US $ 70.75179 million, - and at the
beginning of the cost of the damage suffered by the company is
as much as US $ 18.53355 million, - whereas the proposed fee
with EOQ Rp 30,916,912, - so as to known how the difference in
Difference = (Cost before - after fee) + Cost of Damage
= (Rp 70.75179 - Rp 30,916,912) + Rp 18.53355
= Rp 58,368,428, So the difference between the cost of having performed
with EOQ calculation is Rp 58,368,428, - this is the cost that
should be minimized by the company in controlling inventory
costs of raw materials Calcium carbonate (CaCO3).
This proves that the EOQ can be applied to the company because
it can save costs. Large start-up costs before calculating EOQ is
Rp 70.75179 million, -. Costs arising only from January to July
or in any half-year period, especially if in one year may cost
could develop into a doubling of the cost of the original. While
the total costs incurred EOQ only Rp 30,916,912, - and even then
already incurred costs in one year. Means in this case, the
company can save Rp 58,368,428, - if using EOQ method in
inventories of raw materials, especially calcium carbonate
Need further assessment criteria analysis supplier /
manufacturer both in terms of the ability to provide
good quality and quantity to meet the demand
according to the calculation of Economic Order
quantit (EOQ).
Need a more in-depth assessment of the delivery
method and the process of preparing the charge in
transporting raw materials either.
In calculating Economic Order quantit (EOQ), only
based on the cost of the message and save costs, it
might be better if developed with memeperhitungkan
shipping (shipping), transportation capacity, and if the
capacity of the machine in the production process and
the use of raw materials for generate more accurate
Pengawsan further, the supply of calcium carbonate
(CaCO3), because bersarkan material movement is a
kind of inventory of Fast Moving (Rapid Movements).
Assauri, sofyan, 2004, Manajemen produksi dan operasi (Edisi
revisi). Fakultas Ekonomi Universitas Indonesia. Jakarta.
Gozali, Ade setiawan. 2012. Implementasi Metode Economic
order quantity (EOQ) pada sediaan knop jendela UD.IN JA,
Samarinda. Jurnal Ilmiah Mahasiswa Universitas Surabaya Vol.
1 No. 1 (2012). Fakultas Bisnis dan Ekonomika. Universitas
Surabaya. Surabaya.
Handoko, H T. 2000. Dasar-dasar Manajemen Produksi dan
Operasi. Edisi Pertama. Yogyakarta: BPFE – Yogyakarta
Jurnal PASTI (Volume 4 Nomor 2 Januari 2011) ISSN : 20855869. Judul Sistem Pengendalian Persediaan Berbasis EOQ
Multi Item Pada Pabrik PCB. Universitas Mercubuana
Makridakis, Spyros. 1993. Accuracy Measures: Theoritical and
practical concerns. International Journal of Forecasting Elsevier
Much Djunaidi, Siti Nandiroh, dan Ika Oktaviana Marzuki. 2005.
Pengaruh Perencanaan Pembelian Bahan Baku Dengan Model
EOQ untuk Multi Item Dengan All Unit Discount. Jurnal Ilmiah
Teknik Industri, 4 (2): 86-94.
Pamungkas,Wahyu Tri. 2011. Analisis Pengendalian Bahan
Baku Menggunakan Metode EOQ (Economic Order Quantity)
Studi Kasus Pada PT Misaja Mitra CO.LTD, Universitas Ahmad
Dahlan, Jakarta.
5.1 Conclusion
Based on the research that has been done, obtained some
conclusions as follows:
1. Based perhitungangan using Economic Order Quantity
(EOQ), Quantity booking Calcium carbonate (CaCO3) is
optimal ≈ 81 206 kg or 1,624 sacks. Frequency of purchase
as many as three (3) times in one year with the cost of Rp
12.735 million, -. Booking is more efficient than previous
frequently ordering.
2. Point reordering (Reorder point) is done when the inventory
reaches 42 228 ≈ 845 Kg sack with safety stock (Safety
Stock) as much as 18 690 kg. The distance of time between
an order made or during the duration of the endless material
for 105 days, with a maximum inventory (Maximum
inventory) 99 896 Kg.
3. Total costs incurred after the Economic Order Quantity
(EOQ) as much as Rp 30,916,912, - whereas the actual cost
before EOQ calculation is Rp 89.28534 million, -. Means in
this case, the company can save Rp 58,368,428, - if using
EOQ method in inventory control of raw materials,
especially calcium carbonate (CaCO3).
5.1 Suggestion
Based on the research that has been done, some suggestions
Obtained as follows:
1. Companies should review the policy of raw material
inventories submarine has been done by perrusahaan.