The Utilization of the Economic Order Quantity (EOQ) Method to Enhance the Efficiency of Raw Material Inventory at PT. Trimas Madya in Kampar District, Riau Province

Abstract

With correct raw material inventory control, the company can optimize production results and profits. This study aims to: 1) Analyze the planning and control system of raw material inventory carried out by PT. Middle Trimas; 2) Analyze the application of the Economic Order Quantity (EOQ) method in increasing the Efficiency of Raw Material Inventory at PT. Middle Trimas. 3) Knowing the minimum costs incurred if the company determines the planning method. This research is a type of quantitative research, using all data related to the procurement of supplies of raw materials used. as well as raw material inventory costs. Data collection techniques used are interviews and documentation. The analysis used is the Economic Order Quantity (EOQ) method. The results of the study show that: 1) The ideal number of orders based on the Economic Order Quantity (EOQ) is 910.77, or even 911 M3, 2) The frequency of purchases in one year is 11 orders, meaning that in one month there is 1 order. Meanwhile, the company orders wood 70 times a year. 3) Total safety stock (Safety Stock) of wood raw materials at PT. Trimas Madya is 136 M3. 4) The amount of safety stock that must be controlled by PT. Thank you Madya District. The mine must re-order raw materials when the available supply of wood raw materials is 207 M3. 5) The total cost of raw material inventory issued by PT. Thank you Madya District. Mine in 2022 is IDR. 23,338,598. From the research results, it can be concluded that the use of the EOQ method can reduce inventory costs and the level of raw material requirements in an economical and optimal manner compared to the methods used by companies.