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Inventory Management Improvement at PT Inalum, Kuala Tanjung, Sumatra Utara

Author

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  • Izky Ardiananta

    (School of Business & Management, Indonesia)

  • Mursyid Hasan Basri

    (School of Business & Management, Indonesia)

Abstract

This research aimed to analyze the inventory issue in PT Inalum. The method used in this research is a quantitative method to collect inventory historical data from January 2022 to December 2022 obtained from the company’s ERP SAP. The data contains information of 6028 items of the MRO inventory. The collected data was analyzed using Economic Order Quantity (EOQ), Reorder Point (ROP), Safety Stock (SS) and Average Inventory Level (AIL). By using Fixed Order Quantity model, the MRO inventory is calculated to compare the ideal and actual average inventory levels. From the analysis, the researcher found that the MRO inventory in Kuala Tanjung, PT Inalum, has a service level of 0.52, which is still far below the service level target of 0.95. At the same time, PT Inalum has the potential to reduce inventory by USD 5,402,389 or 58.2% of the inventory value. This research aims to provide guidance for the management of PT Inalum in making inventory policies that can increase service levels as well as minimize inventory costs.

Suggested Citation

  • Izky Ardiananta & Mursyid Hasan Basri, 2024. "Inventory Management Improvement at PT Inalum, Kuala Tanjung, Sumatra Utara," European Journal of Business and Management Research, European Open Science, vol. 9(2), pages 71-78, March.
    • Handle: RePEc:epw:ejbmr0:v:9:y:2024:i:2:id:52302
    DOI: 10.24018/ejbmr.2024.9.2.2302
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