Green inventory controlling analysis of coal using the lot sizing technique: Lesson learned form nickel mining industry

Abstract

Companies, including PT Vale Indonesia (PTVI), generally should implement inventory control. PTVI use approximately 32,077 tons per month coal as a heating catalyst on the reducing furnace. There were several periods in 2017 and 2018 where the coal inventory exceed the safety stock and maximum stock level with the total cost of IDR 616,059,680.00 in 2017 and IDR 669,720,480.00 in 2018. In order to analyze and solve that stock problems, this research used the Lot-Sizing technique with Lot for Lot (LFL), Economic Order Quantity (EOQ), Part Period Balancing (PPB), and the Silver-Meal Algorithm (SMA) methods to obtain the demand and appropriate order time, by considering the lead time factor, safety stock, and reorder point to obtain the efficient costs. As a result, the safety stock value was 7,922 tons with reorder point 18,674 tons. The PPB and SMA methods gave the most minimum total inventory cost of IDR 437,021,589,280 and efficiency of 34.74%.