INVENTORY CONTROL OF BROWN PAPER RAW MATERIALS USING THEMATERIAL REQUIREMENT PLANNING METHOD IN PAPER COMPANY

Abstract

Inventory of raw materials is an essential element in the production process. The
research was conducted in a paper company with different product demand
problems each period, resulting in excessive raw material inventory in the
warehouse and high inventory costs. Material Requirement Planning (MRP) is the
right system to deal with uncertainty when planning raw material requirements. The
lotting techniques used in this study are Lot For Lot (LFL), Economic Order
Quantity (EOQ), and Fixed Period Requirements (FPR). For January 2021 - March
2022, the LFL lot size MRP method resulted in the smallest total inventory cost of
Rp 92.228.707.169 and managed to save 9.2% of costs compared to the company's
actual costs. Inventory control with LFL lot size for April 2022 – June 2023
requires 14 orders with the DSOCC raw material inventory 11.865.136,77 kg; OCC
5.256.037,55 kg; NDLKCA 4.262.881,19 kg; local box 3.340.998,93 kg and the total
cost of inventory is Rp 110.075.072.816,14.