Abstract :

TVF Footwear is a sandal and shoe brand originally from Bandung. It was founded in 2010 because, at that time, local industries were emerging, and they were motivated to make products that focus on the footwear category. TVF Footwear has an issue related to overstock inventory. The purpose of this research is to reduce overstock and improve inventory management in TVF Footwear. The root cause analysis is used Current Reality Tree (CRT) as a tool to find the root cause of overstock issue that faced by TVF Footwear. The result from root cause analysis are a lack of forecasting and deficient inventory management. The proposed solution is to prepare TVF footwear to apply the appropriate forecasting demand method for the next period and help the company to plan its inventory management by calculating the EOQ, ROP, and Safety stock. The result of the forecasting demand with the smallest forecasting error shows that the method chosen for Rainier is double exponential smoothing. The forecasting method that is suitable for Reiwal is trend analysis and the forecasting method that has the smallest error for Semeru is single exponential smoothing. The result for the EOQ method has a lower cost than the existing method. The total cost from the existing method is Rp 4.082.500.000 while the total cost using the EOQ method amounts to Rp 3.678.495.281. If the company can implement the EOQ method, the potential cost saving is Rp 404.004.718.

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Keywords :

EOQ, Forecasting demand, Inventory management, Overstock, ROP, Safety stock.

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