Cost and Quantity Inventory Analysis in the Garment Industry: A Case study

Abstract

This study aims to evaluate how effective and efficient inventory is in the fashion industry by using the EOQ method. This research is a quantitative study of WKB companies. The data used in this study are data for 2017 and 2018 covering the number of purchases and use of raw materials, data on ordering costs, data on holding costs, raw material prices, and Lead time. The results of this study indicate that, the level of frequency of purchases made more than 100 times resulting in high ordering costs. By using the EOQ method inventory becomes more effective and efficient, with order frequency being 15 times a year and ordering costs being less. The number of efficient inventories for one order based on EOQ in 2017 is 647 kg and in 2018 is 809 kg. For inventory costs using the EOQ method in 2017, the cost will be IDR 594,867.69 per year and in 2018 the cost will be IDR 612,956.26 per year. Costs that can be saved after using EOQ in 2017 are IDR 10,811,247.31 or 94.78%. Costs that can be saved after using EOQ in 2018 will cost IDR 11,066,168.74 or 94.75%.