Improvement of Inventory Management to Reduce Cost of Buying New Inventory
| Main Authors: | Warman, Chandra; School of Business and Management, Institut Teknologi Bandung, Nizar, Adirizal; School of Business and Management, Institut Teknologi Bandung |
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| Format: | Article info application/pdf eJournal |
| Bahasa: | eng |
| Terbitan: |
Proceedings of International Conference on Management in Emerging Markets (ICMEM) SBM ITB
, 2022
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| Online Access: |
https://journal.sbm.itb.ac.id/index.php/ProceedingSBMITB/article/view/4787 https://journal.sbm.itb.ac.id/index.php/ProceedingSBMITB/article/view/4787/1674 |
Daftar Isi:
- Natural gas is distributed through gas infrastructure from gas sources to consumers. Gas infrastructure must be maintained to minimize disruption of gas distribution. Inventory has important role to support gas infrastructure reliability especially if replacement of damaged materials is required. This study is conducted at natural gas distribution and transmission company. The purpose of this study is to evaluate the inventory management applied by the company to reduce the cost of purchasing new materials which results in high inventory level in 2020. This study is using the fixed-time period model to determine safety stock level and order quantity should be placed. Pareto analysis is conducted to determine which materials contribute to 80% of total cost of buying new inventory in 2020. There are five materials that contribute the most and be analyzed further. Forecasting simulations are carried out to obtain demand forecasts based by using trend projection method. Trend projection forecasting method using quarterly data provides a lower error than trend projection forecasting method using monthly data. By implementing fixed-time period model, order quantity of each material can be reduced. Keywords: Inventory Management, Safety Stock, Fixed-Time Period Model, Forecasting