Method of Economic Order Quantity (EOQ) as an Analysis of Raw Material Inventory Control at PT Metalindo Main Engineering

Abstract

PT Metalindo Teknik Utama is a company engaged in Manufacturing (body of a car). So far, in managing
raw material inventories, the company used simple method with buy raw material if the inventory is out of
stock. The use of this method resulted in the cost of managing the raw materials incurred is still relatively
expensive. This study aims to analyze the cost of inventory management based on the Economic Order
Quantity method and compare the costs of inventory management implemented by the company in 2020.
The data is taken based on the company's annual financial statements prepared in 2020. The data is
analyzed using the EOQ formula. Results of the research in the form off O2, the number of economical
orders according to EOQ is 141 tube with a raw material inventory cost of Rp. 6,771,277 while according
to the company's method of Rp. 25,542,451 then obtained savings or a difference of Rp. 18,771,174. In
CO2 the number of economical orders according to EOQ is 130 tube with a raw material inventory cost of
Rp. 6,770.777, while according to the company's method it is Rp. 23,601,184 then the savings or
difference is Rp. 16,830.407. For LPG, the number of economical orders according to EOQ is 31 tubes
with a raw material inventory cost of Rp. 1,447,350 while according to the company's method it is Rp.
4,631,372 then the savings or difference is Rp. 3,184,022.