SYSTEM DYNAMIC MODELING OF AN INVENTORY SYSTEM TO MINIMIZING OF INVENTORY COST
Mohamad Satori, Muhammad Hilmi Fauzan, Puti Resnosori
Universitas Islam Bandung
Abstract
Nowadays business competition is getting tougher, especially with regard to meeting consumer needs. Unstable market demand is often a challenge for companies in meeting market demand. Conditions of demand that are often more than inventory or vice versa incur costs that must be borne by the company. The study was conducted at PT. Tri Sapta Jaya which is engaged in the distribution of medical devices, medicines and formula milk. The problem that arises is when the supply is more than demand, the company will have to bear the cost of saving. Meanwhile, when inventory is less than demand, the company must bear the cost of a product backlog. Problem-solving uses a dynamic system approach that has the characteristics of being influenced by time and the existence of interrelationships loop. Causal loop and stock & flow diagrams are used to describe the companys inventory system, then scenarios are carried out to minimize inventory system costs. Two improvement scenarios were carried out, namely the scenario of increasing safety stock and the scenario of reducing lead time. The results obtained from the study are the improvement scenarios chosen are the scenarios of reducing lead time. This scenario can reduce the total cost of the inventory system by Rp. 13,879,099. By applying this scenario, the company can reduce the cost of saving which is one of the costs in total costs
Keywords: backlog, lead time, dynamic system, inventory cost
Topic: Industrial Engineering