RAW MATERIAL INVENTORY CONTROL AT THE ROCKZ HOTDOG BUSINESS

Vikki, . (2020) RAW MATERIAL INVENTORY CONTROL AT THE ROCKZ HOTDOG BUSINESS. S1 thesis, Universitas Atma Jaya Yogyakarta.

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Abstract

Raw materials are one of the most important elements that must be controlled by every industry or business in order to get the best outcomes. If this element is not controlled good enough, it can lead to ineffective raw material flow. It may affect the business in terms of outcomes such as sales. The sales affected can come from an ineffective inventory control strategy that leads to high total cost or the inability to fulfill customers’ demand. In other words, when it comes to controlling raw materials, elements included in total cost such as setup cost, shortage cost, scrapped cost, and holding cost must be considered. To control these elements, inventory control method is used considering the order quantity and reorder point as its variables of the analysis. The purpose of this research is to apply inventory control knowledge to help The Rockz Hotdog business, as one of the food industry business in reviewing and improving its raw material inventory control policy considering the expiry dates and order lead time of the raw materials. With inventory control application towards the business, it is hoped it can improve the business’ outcomes such as minimized total costs and maximized customers’ demand fulfillment rate. The first step is to collect important data for the analysis, such as past sales data and supporting data. After that, the past sales data are being classified based on the amount of demand at certain times. Then, the classified data are put in input analyzer software in order to help generating random demand values that correspond to the actual demand data. Then alongside supporting data, the simulations in Excel software are carried out. These simulations are made to represent the actual conditions of the business. Then, using inventory control knowledge, methods are used to find an approximation of optimal solutions for the business. Then, the optimal solution can be selected between candidates stated in the simulations.

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