Abstract:
Service level is one of the measurement of the competitiveness in the market for every business performance. The better service level, the better the performance of the company. PT. XOX prioritizes the satisfaction of the customer by ensuring that their product is delivered on time to the customer, therefore PT. XOX has an On Time Delivery Service (OTDS) level measurement that is measured annually. This OTDS can be influenced by several factors, but most influential factor is the material arrival. This material arrival later on will impact the entire process of the production process. When there is a delay in production, the delivery to the customer will be delayed, then the OTDS level will be decreased. In order to increase the OTDS, it will need more cost, however the strategic purpose of the company is to minimize cost as much as possible which contradicts the goal of improving the OTDS. PT. XOX will need to make choice in having stocks in the end of the year to prevent shortage material or to pull the shipment by using air shipment mode which is more expensive than sea shipment mode. This shipment selecting will have the impact in the ratio between total sales and the total material cost. By using this periodic review approach for ordering material, the target of the service level will be achieved and the ratio of the material cost and the total sales will be decreased by 10% which is favorable to the company.
