SCM – Siti Dwi Lazuardi

LECTURE 6 – INVENTORY MANAGEMENT (1)

74
 Inventory

SCM – SITI DWI LAZUARDI 75

 Inventory
 Inventory  the raw materials, work-in-process (WIP)
products and finished goods that are considered to be the
portion of a business's assets that are ready or will be
ready for sale.
 Inventory = Stock = Persediaan

Inventory Management  Pengelolaan persediaan barang

pada Supply Chain

SCM – SITI DWI LAZUARDI 76

 Inventory
 Persediaan memiliki implikasi yang besar terhadap kinerja
finansial suatu perusahaan di sepanjang supply chain.
 Jumlah uang yang tertanam dalam bentuk persediaan
sangat besar  Persediaan merupakan salah satu asset
terbesar.
 Banyak perusahaan yang memiliki nilai persediaan >25%
dari keseluruhan asset yang dimiliki.
 Artinya, biaya modal yang tertahan dalam bentuk
persediaan di suatu perusahaan/supply chain bisa sangat
besar.

Manajemen persediaan yang baik berpengaruh besar terhadap

kinerja finansial sebuah perusahaan.

SCM – SITI DWI LAZUARDI 77

 Inventory Management
 Salah satu tujuan utama supply chain  Mengelola
aliran material/ produk dengan tepat.
 Aliran yang tepat  Artinya: tidak terlalu terlambat
dan tidak terlalu dini, jumlahnya sesuai dengan kebutuhan
dan terkirim ke tempat yang sesuai dengan kebutuhan.
 Kenapa persediaan muncul?
• Karena memang direncanakan
• Atau merupakan akibat dari ketidaktahuan terhadap informasi:
uncertainty demand dan perbedaan lokasi (lead time)

SCM – SITI DWI LAZUARDI 78

Cycle Inventory
The average inventory in a supply chain due to either production or
purchases in lot sizes that are larger than those demanded by the customer.
Lot size or batch size (Q) : The quantity that a stage of a supply
chain either produces or purchases at a time.

79
Strategic Stock

80
Strategic Stock

81
Strategic Stock

82
 Inventory
Make a good balance between purpose and costs of
inventories

Types of costs:
 Ordering (set-up) costs (transportation + administration)
 Inventory carrying or holding costs (invisible)
- capital costs
- storage costs
- risk costs (obsolescence, price changes)
Often expressed as % of capital employed; rates of
20%-25% are used
 Costs of goods themselves

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 Inventory Cost
Total Annual Cost = Annual material cost + Annual ordering cost + Annual holding
cost  when demand is steady, lead time = 0, no stock-out)
Annual material cost = C*D
Number of orders per year = D/Q
Annual ordering cost = (D/Q)*S
Annual holding cost = (Q/2)*h*C

Total Inventory Cost = C*D + (D/Q)*S + (Q/2)*h*C

Where:
C = Cost per unit
D = Annual demand of the product
Q = Lot size (number of ordering products for each replenishment order)
S = Fixed cost incurred per order
h = Holding cost per year as a fraction of product cost (i.e. 20-25% per year)

SCM – SITI DWI LAZUARDI 84

 Model Persediaan
Model Economic Order Quantity (EOQ)
 Manajemen persediaan  penting untuk mengetahui
besarnya ukuran persediaan.
 Untuk kebutuhan yang stabil  Ukuran pesanan akan
berimplikasi pada frekuensi pemesanan dan rata-rata
persediaan yang disimpan.
 Semakin kecil ukuran pesanan, semakin cepat
persediaan habis  Semakin sering pesanan dilakukan.

SCM – SITI DWI LAZUARDI 85

 Model Persediaan
Model Economic Order Quantity (EOQ)
 Model sederhana yang bisa digunakan untuk
menentukan ukuran pesanan yang ekonomis.
 Mempertimbangkan 2 (dua) ongkos persediaan, yaitu:
1. Ongkos pesan
2. Ongkos simpan
 EOQ merupakan turunan pertama dari fungsi biaya
persediaan (inventory cost).

SCM – SITI DWI LAZUARDI 86

 Model Persediaan
Optimal lot size (Q*) = EOQ
dTC/dQ = 0  the first derivative

Q* =
Optimal ordering frequency (n*)
D
n* = =
∗

SCM – SITI DWI LAZUARDI 87

 Inventory Cost
Example Case:
Demand for computers at Hartono: 1,000 units per month, hence D = 12,000 units/year
Fixed order placement, transportation and receiving costs of $ 4000 per order
Cost (and not price!) of individual computer $ 500
Holding cost rate 20% per year

Optimal order size : Q* =

Q∗
Cycle inventory =
Number of order per year (n*) :
D
n* =
∗
D Q∗
Annual ordering + holding cost = S+( )h*C
∗
Q∗
Average flow time =

SCM – SITI DWI LAZUARDI 88

 Inventory Cost
Example Case:
Demand for computers at Hartono: 1,000 units per month, hence D = 12,000 units/year
Fixed order placement, transportation and receiving costs of $ 4000 per order
Cost (and not price!) of individual computer $ 500
Holding cost rate 20% per year
∗ , ∗ ,
Optimal order size : Q* = = = 980 computers
%∗
Q∗ 980
Cycle inventory = = = 490 computers
Number of order per year (n*) :
D 12,000
n* = = = 12.24
∗
D Q∗
Annual ordering + holding cost = S + ( )h*C = $97,980
∗
Q∗ 980
Average flow time = = = 0.49 month/each computer
∗ ,

SCM – SITI DWI LAZUARDI 89

SCM – Siti Dwi Lazuardi

LECTURE 7 – INVENTORY MANAGEMENT (2)

90
 Multiple Products
There are three approaches to the lot-sizing
decision:
1. Each product is ordered independently
2. Every product in each lot is ordered jointly
3. Order jointly but not every order contains every
product  each lot contains a selected subset of
the products  ( X )

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 Multiple Products
1. Multiple Products with Lots Ordered and Delivered Independently
Example:
Hartono sells three models of computers, the Litepro, the Medpro
and the Heavypro. Annual demands for these products are DL=
12,000 units, DM= 1,200 units and DH = 120 units. Each model costs
$500. A fixed transportation cost of $4,000 is incurred each time
an order is delivered. For each model ordered and delivered on the
same truck, an additional fixed cost of $1,000 is incurred for
receiving and storage. Hartono incurs a holding cost of 20%.
Evaluate the lot sizes that the Hartono’s manager should order if lots
for each product are ordered and delivered independently. Also
evaluate the annual cost of such a policy.

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 Multiple Products
1. Multiple Products with Lots Ordered and Delivered Independently

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 Multiple Products
Optimal lot size (Q*) = EOQ
dTC/dQ = 0  the first derivative

Q* =
Optimal ordering frequency (n*)
D
n* = =
∗

SCM – SITI DWI LAZUARDI 94

 Multiple Products
1. Multiple Products with Lots Ordered and Delivered Independently

Litepro Medpro Heavypro

Demand D unit/year 12,000 1,200 120
Unit Cost C $ 500 500 500
Fixed cost S $ 5,000 5,000 5,000
Holding h % 20% 20% 20%
Optimal order size Q* unit 1,095 346 110
Cycle Inv. Q/2 unit 548 173 55
Annual holding cost HC $ 54,772 17,321 5,477
Order freq. n /year 11.0 3.5 1.1
Annual ordering cost OC $ 54,772 17,321 5,477
Annual cost TC $ 109,545 34,641 10,954

SCM – SITI DWI LAZUARDI 95

 Multiple Products
2. Multiple Products with Lots Ordered and Delivered
Jointly
Combined fixed order cost per order
S* = S + s1 + s2 + s3 + ….. + si

Where:
S* = combined fixed cost
S = fixed transportation cost

si = additional cost

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 Multiple Products
2. Multiple Products with Lots Ordered and Delivered
Jointly
Optimal order frequency 
dTC/dn = 0  the first derivative

∑
n*= √
∗
Where:
n = The number of orders placed per year
C = Cost per unit
D = Annual demand of the product
S = Fixed cost incurred per order
h = Holding cost per year as a fraction of product cost (i.e. 20-25% per year)

SCM – SITI DWI LAZUARDI 97

 Multiple Products
2. Multiple Products with Lots Ordered and Delivered
Jointly
Combined fixed order cost per order
S* = S + s1 + s2 + s3 + ….. + si
Annual Order Cost = S* x n*
Annual Holding Cost = + +⋯+
∗ ∗ ∗
Total Annual Cost = S* x n* + + +⋯+
∗ ∗ ∗
Where:
n = The number of orders placed per year
C = Cost per unit
D = Annual demand of the product
S = Fixed cost incurred per order
h = Holding cost per year as a fraction of product cost (i.e. 20-25% per year)

SCM – SITI DWI LAZUARDI 98

 Multiple Products
2. Multiple Products with Lots Ordered and Delivered
Jointly
S* = S + s1 + s2 + s3 + ….. + sn
S* = 4,000 + 1,000 + 1,000 + 1,000 = $ 7,000 per order
∑ , ,
n*= √ =√ = 9.75 orders/year
∗ ,

Annual Order Cost = n* x S* = 9.75 x 7,000 = $ 68,250

SCM – SITI DWI LAZUARDI 99

 Multiple Products
2. Multiple Products with Lots Ordered and Delivered
Jointly
Combined fixed order cost S* $ 7,000
Optimal order freq. n* 9.75
Annual order cost OC $ 68,279

Litepro Medpro Heavypro

Demand D unit/year 12,000 1,200 120
Optimal order size Q* unit 1,230 123 12.3
Cycle Inv. Q/2 unit 615.12 61.51 6.15
Annual holding cost HC $ 61,512 6,151 615
Annual cost TC $ 136,558

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 Multiple Products
Comparison of Annual Total Cost:

1. Independently =
$109,545 + $ 34,641 + $ 10,954 = $ 155,140

2. Jointly =
$ 68,279 + $ 61,512 + $ 6,151 + $ 615 = $ 136,558

By ordering all products jointly, the annual total cost decreases

by 12%.

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 Tugas Kelompok:
1. Buat resume materi tentang “Economies of scale to
exploit quantity discounts” Buku SCM 5th edition Sunil
Copra & Peter Meindl, Chap.11, Sub.chap. 11.4, hal.
289
a. All unit quantity discounts
b. Marginal unit quantity discounts
2. Kerjakan Exercises No. 1, 2, 3 & 4 hal. 308-309
3. Dikumpulkan dalam bentuk softcopy (Ms. Word) paling
lambat hari Kamis, 2 April 2020 jam. 15.00 WIB.
4. Tugas kelompok tetapi penilaian individu. Sertakan
nama dan NRP sebelum menjawab soal.
SCM – SITI DWI LAZUARDI 102