Inventory Problem 1

Please read Render’s book Quantitative Analysis for Management, 13th ed., Chapter 6 on Inventory
Control Models.
Use QM to solve this problem.
Barbara Bright is the purchasing agent for West Valve Company. West Valve sells industrial valves
and fluid control devices. One of the most popular valves is the Western, which has an annual demand
of 4,000 units. The cost of each valve is $90, and the inventory carrying cost is estimated to be 10% of
the cost of each valve. Barbara has made a study of the costs involved in placing an order for any of
the valves that West Valve stocks, and she has concluded that the average ordering cost is $25 per
order. Furthermore, it takes about two weeks for an order to arrive from the supplier, and during this
time, the demand per week for West valves is approximately 80.
a. What is the EOQ?
b. What is the ROP?
c. Is the ROP greater than the EOQ? If so, how is this situation handled?
d. What is the average inventory? What is the annual holding cost?
e. How many orders per year would be placed? What is the annual ordering cost?
Jawaban

West Valve Inventory Problem

Annual demand (D) = 4000 units
Unit cost = $90
Carrying cost per unit (Ch) = 10% of $90 = $9
Average ordering cost (Co) = $25 per order
Delivery time = lead time (L) = 2 weeks
Demand per week (d) = 80

a. What is the EOQ?

EOQ = Q = optimal order quantity = 149.07 unit
Dalam inventory, setiap ordering memiliki biaya (ordering cost), jadi jika ingin meminimalkan biaya
order ini, kita ingin melakukan order sesedikit mungkin dan membeli produk dalam jumlah besar
sekaligus. Tapi di pihak lain, jika order terlalu banyak, maka barang akan semakin lama disimpan di
gudang, sedangkan penyimpanan di gudang juga memiliki biaya (holding cost). EOQ adalah jumlah
order ketika ordering cost = holding cost, dan ini merupakan optimal order quantity yang dapat
meminimalkan total cost.

Hitungan manual:
Q = sqrt((2 x D x Co) /Ch) = sqrt((2x4000x25) / 9)
= sqrt(200,000/9) = sqrt(22,222.22) = 149.07 unit = 149 unit

b. What is the ROP?

ROP = 160, artinya perlu reorder ketika di gudang tinggal 160 unit
Karena demand per week adalah 80, maka dalam 2 minggu, stock di gudang akan habis, dan tepat
pada saat itu, barang yang diorder tiba.
Hitungan manual:
ROP = (Demand per week) x (Lead time in weeks)
= 80 x 2 = 160 unit
Catatan:
Demand rate yang saya input ke QM adalah weekly bukan daily = 80, dan Lead time yang saya input
ke QM adalah in weeks bukan in days = 2 weeks. Jika ingin menggunakan daily, maka dapat diinput
demand rate = 11.43, lead time = 14. Hasil ROP akan sama.
ROP = (demand per day) x (Lead time in days)
= 11.43 x 14 = 160.02
Satu lagi, anda cukup mengisi salah satu antara: Days per year atau Daily demand rate. Jika demand
rate sudah disi, days per year tidak perlu diisi lagi. Jika anda mengisi days per year, maka QM akan
otomatis menghitung daily demand rate dari: Demand rate (annual) / days per year.

c. Is the ROP greater than the EOQ? If so, how is this situation handled?
Ya, ROP = 160, sedangkan EOQ = 149
Untuk mengatasi ini, maka inventory position perlu dipecah menjadi:
inventory position = inventory on hand + inventory on order
160 = 11 + 149
Ini berarti perusahaan harus melakukan reorder ketika satu order sedang dalam pengiriman (berisi 149
unit), dan di gudang tinggal ada 11 unit.

d. What is the average inventory? What is the annual holding cost?

Average inventory = 74.54
Annual holding cost = $670.82
Hitungan manual:
Average inventory = Q/2 = 149.07/2 = 74.54
Annual holding cost = Q/2 x Ch = 149.07/2 x 9 = 670.82

e. How many orders per year would be placed? What is the annual ordering cost?
Orders per year (N) = 26.83
Annual ordering cost = $670.82
Hitungan manual:
Orders per year = D/Q = 4000/149.07 = 26.83
Annual ordering cost = D/Q x Co = 4000/149.07 x 25 = 670.82