IMPORTED RAW MATERIAL INVENTORY CONTROL SYSTEM AS AN EFFORT TO MINIMIZE INVENTORY COST (A CASE STUDY IN PT APPAREL ONE INDONESIA)

Abstract

This study aims to forecast the polyester
usage for the upcoming 12 months and to find
out the suitable method of imported raw
material inventory control in PT Apparel One
Indonesia by comparing and analyzing the
implementation of JIT concept and EOQ
method as well as to determine the safety
stock and reorder point in inventory
procurement of the company. The data used
in this study are secondary data of imported
raw material procurement system, the costs
associated with raw materials inventory
2015-2016 and other relevant data. Polyester
is observed since it is imported fabric raw
material which mostly used in the company.
The polyester usage predicted by regression
is continuously increases per month. The
forecasting result can be accepted because
the tracking signal value is not more than ± 4.
Whereas, EOQ method is more suitable to be
used by the company since the inventory cost
is lower than the cost applying JIT concept. It
is possible to save 13% or 9,512,693.3 IDR.
Moreover, by applying EOQ method, it also
determines the reorder point (ROP) and
safety stock inventory to guarantee the
smoothness of production activities. The
company can purchase raw materials when
the quantity of inventory is amounted to
375.547 yards (ROP), while the safety stock
of polyester fabric is 43,006 yards.