APPLICATION OF ALL-UNIT DISCOUNT FACTOR FOR PERISHABLE PRODUCT REPLENISHMENT IN FOOD MANUFACTURING INDUSTRY

Abstract

Raw material inventory could be considered as a capital in form of material, which is needed to sustain the production and operation of a company. The general matter which usually arises to manage the inventory is how much quantity that is required supporting the base operation. More overly, the model becomes complex if company has to consider both of the expiration factor and also quantity discount for item which is provided by the supplier into their system. In order to obtain the integrated inventory model, this research is conducted by utilizing the basic economic order quantity (EOQ); especially by adjusting the several contributing factors in the single-item purchasing plan. To verify the model, validation is conducted by eliminating the expiry factor and also all-unit discount from the total inventory cost formula. Basic algorithm is also utilized as the problem solving procedure to apply the method into the real system and condition. At the end of the research, the optimum order quantity will be found along with the optimum order cycle time and also the minimum value of total inventory cost. The conclusion and recommendation are given at the last chapter as a summary for the whole thesis dissertation progress.