Articles

Inventory Management with EOQ Model for Telecommunication Tower Accessories (Study Case at BMTec)

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BMTec is a telecommunication infrastructure manufacturer based in West Java, Indonesia. They produce tower accessories made of steel materials with various fabrication processes. The ineffectiveness of their current inventory management system has driven them to stockpile raw materials, resulting in reduced material quality in the form of corrosion and obsolescence. This brings up the question regarding how to improve the inventory management in the company, then drives the research to compare the effectiveness of BMTec’s current inventory management with the new-preferred inventory model. Before analyzing the mentioned issue, the primary data is gathered, accompanied by semi-structured interviews for the additional empirical data. An ABC classification is used to distinguish the essential items, which results in the telecommunication tower harmonica fence as the most crucial product in BMTec. Demand forecasting is applied based on the pattern of historical demand data. The Holt-Winters method was chosen due to the ability to adjust the seasonality and trend factor, although the forecasting inaccuracy reached 4.7 (MAD) and 78.4% (MAPE). By comparing the inventory costs over the current company’s method and EOQ model, analysis shows that with the EOQ model, BMTec could save their inventory cost 2022 up to 68%. The discussion in this paper begins with the background of the research’s underlying issues, followed by a literature review to update the scientific development for related studies. The third section conveys how the flow of this research is conducted, then discusses the findings or results from the analysis of collected data and chosen methods.

Analysis of Inventory Management in Order to Reduce Overstock (Case Study of TVF Footwear)

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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.