Raw Materials Inventory Planning in Automotive Industries by EOQ Method Consider with the Contract Agreement

Abstract

One of industrial sector that currently continuous growing up is automotive industry. Safety glass is a kind of automotive component that always has improvement and development. To support production running well, raw materials supply inventory has to be considered and managed as well. Poly Vinyl Butyral (PVB) as raw material is purchased from 2 suppliers and both of them have a contract agreement. Inventory shall be set up to fulfill the demand and follow the contract. By use Economic Order Quantity (EOQ) Method, inventory is calculated to minimize the cost. So the research objective is to determine inventory system of PVB and inventory cost by optimum. Then researcher got the result is EOQ Method can reduce the inventory cost around 52% than last period by keep consideration with the contact agreement.