DESIGNING INVENTORY MANAGEMENT SYSTEM OF SPARE PARTS BY IMPLEMENTING CONTINUOUS REVIEW SYSTEM AND PERIODIC REVIEW SYSTEM AT PT. EF

Abstract

Recently, the tight competition in manufacturing industry requires a smooth, stable, and optimal production process. Inventory management is an important aspect that will affect to the fulfillment of customer demand. In planning and controlling the inventory, PT. EF needs an effective replenishment system. The objectives of this research is to (1) classify the inventory stocks with the application of ABC analysis, (2) to plan the inventory stocks for each Class A, B, and C, and (3) to control the inventory stocks for each Class A, B, and C. In order to achieve the objectives, the research is analyzing the current inventory by ABC Analysis and Continuous Review System and Periodic Review System. By using the method, the result of this research is that Class A holds 87 items with IDR 6,783,968,743.09 of total value. Class B holds 125 items with IDR 1,284,337,931.41 of total value. Class C holds 451 items with IDR 427,964,652.78. Additionally, PT. EF can save its total cost up to 14% for each item from IDR 5,137,910.96 to IDR 733,204.71.