CONTROL OF PLASTIC COLORANT PELLET RAW MATERIAL INVENTORY THROUGH THE APPLICATION OF EOQ, RESERVE INVENTORY, AND ROP AT PT TII

Abstract

PT TII is a company in the chemical industry that produces various types of plastic color pellets. The main problem faced by the company is the imbalance between the quantity of raw materials ordered and the actual warehouse capacity, resulting in the need for an optimal inventory control strategy. This study aims to analyze the results of applying the Economic Order Quantity (EOQ) method and determine the Safety Stock, Reorder Point (ROP), and Total Inventory Cost (TIC), which were not previously used by the company. The data used in this study is historical data on raw material usage and purchases from January to December 2024, which is then compared between the company's purchase period system and the proposed method. The results show that the company's purchase period system makes an average purchase of 20,052 kg per month with a frequency of 12 times per year without calculating safety stock and ROP. In contrast, application of EOQ resulted in an optimal order quantity of 32,988 kg with a frequency of 7 times per year, safety stock of 2,268 kg, and ROP of 3,231 kg. In terms of costs, the EOQ method was able to reduce the cost per order from IDR 127,794,678 to IDR 97,259,961, as well as reduce the annual TIC from IDR 1,533,536,139 to IDR 709,462,500. With significant savings of IDR 824,723,237 per year, the implementation of EOQ, safety stock, and ROP can be used as a solution to improve warehouse optimization and cost efficiency for smooth company operations.