Controlling Consumable Material Inventory Using the Multi-Item EOQ Method in the Spare Parts Warehouse of  PT. XYZ

Fahrul Raharja; Enny Aryanny

Authors

Fahrul Raharja Universitas Pembangunan Nasional “Veteran” Jawa Timur
Enny Aryanny Universitas Pembangunan Nasional “Veteran” Jawa Timur

Keywords:

Multi-Item EOQ, inventory optimization, ordering cost, holding cost, total inventory cost

Abstract

Inventory management plays a critical role in maintaining effective maintenance operations within manufacturing environments, where machine reliability significantly influences production continuity. This internship report examines the application of the Multi-Item Economic Order Quantity (EOQ) model to optimize consumable inventory in the Engineering Division of PT. XYZ, a leading ceramic manufacturing company in Indonesia. The division oversees a diverse range of technical consumables, such as mechanical components, metal materials, fasteners, electrical equipment, and transmission parts, all characterized by variable demand and extended procurement lead times.

Suboptimal ordering practices may result in stock shortages that disrupt maintenance activities or excess inventory that increases holding costs and storage inefficiencies. The study utilizes historical procurement data, including an annual material demand of Rp378,190,765, total ordering costs of Rp1,765,530, and annual holding costs of Rp920,106, which encompass warehouse operations and storage-related expenses distributed across all item categories. The Multi-Item EOQ model is applied using a consolidated minor ordering cost parameter to estimate an optimal aggregate order value of Rp38,096,850 per cycle. In addition, optimal order quantities are determined for each item based on unit cost and yearly demand levels.

The analysis identifies an optimal reorder interval of 37 working days, allowing for more systematic procurement scheduling that balances ordering frequency and inventory holding costs. The findings indicate that the Multi-Item EOQ approach enhances procurement efficiency, improves inventory organization, ensures the availability of critical consumables for maintenance activities, and minimizes operational risks associated with inventory imbalance. This approach provides a practical foundation for improving future procurement strategies within the engineering division.

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