IMPLEMENTATION OF TIME SERIES FORECASTING METHOD IN ORDER TO DESIGN NEW INVENTORY PLANNING FOR PT. Ob

Abstract

This research discusses about designing new inventory planning for PT. Ob especially for skin care A. It begins with observation regarding to the material availability and current forecasting data from enterprise resource planning which cause material overstock. The core value of this research is to determine the best inventory planning by using total cost as the parameter. Since the plotting data of this problem shows trend and seasonal, time series is chosen as a proposed forecast method which can solve any pattern behavior of the data with high accuracy. The selected time series model will be used to forecast skin care A demand for several periods ahead. EOQ approach is used to calculate the optimum order quantity, reorder point, safety stock, and total cost that incurred in the inventory. The result of this research shows that the proposed forecast method successfully reduce the forecast error by 10%, and the inventory planning can reduce the total inventory cost from USD 972,522 to USD 815,596 or by 16,14%.