INVENTORY SYSTEM PLANNING OF MARGARINE AND SHORTENING INGREDIENT WITH MONTE CARLO SIMULATION IN ADDITION TO ECONOMIC ORDER QUANTITY (EOQ) METHOD ON PT. SMART TBK

Abstract

1. Smart Tbk. is one of multinational integrated palm oil companies which produce palm oil derivative product such as margarine and shortening. The company has problems with the high inventory cost due to un-optimal ingredient inventory system management by PPIC Department. Therefore, need further analysis about inventory planning using Monte Carlo Simulation. The objective of this research is to determine the optimum amount of each ingredient ordering in order to minimize inventory cost using Monte Carlo simulation method and EOQ. Monte Carlo simulation method is used to forecast demand while EOQ method is used to determine the inventory planning by probabilistic inventory model. By using those methods, the company can improve efficiency by Rp 951,542,844 during the year compared to current inventory policy.

          Key words: Inventory, Monte Carlo Simulation, EOQ, Probabilistic