Inventory control of raw material using silver meal heuristic method in PR. Trubus Alami Malang

Abstract

The purpose of this study was to compare the total inventory cost calculated using the method applied by PR. Trubus Alami and Silver Meal Heuristic (SMH) method. The study was started by forecasting the cigarette demand from July 2016 to June 2017 (48 weeks) using additive decomposition forecasting method. The additive decomposition was used because it has the lowest value of Mean Abosolute Deviation (MAD) and Mean Squared Deviation (MSD) compared to other methods such as multiplicative decomposition, moving average, single exponential smoothing, and double exponential smoothing. The forcasting results was then converted as a raw material needs and further calculated using SMH method to obtain inventory cost. As expected, the result shows that the order frequency of using SMH methods was smaller than that of using the method applied by Trubus Alami. This affected the total inventory cost. The result suggests that using SMH method gave a 29.41% lower inventory cost, giving the cost different of IDR 21,290,622. The findings, is therefore, indicated that the PR. Trubus Alami should apply the SMH method if the company wants to reduce the total inventory cost.