Versi Online: https://journal. id/index. php/jiems Hasil Penelitian Journal of Industrial Engineering and Management System Vol. 16 (No. : no. 28 hlm - no 38 hlm. Th. p-ISSN: 1979-1720 e-ISSN: 2579-8154 KEPUTUSAN LOTSIZING PERSEDIAAN UNTUK PERENCANAAN KEBUTUHAN BAHAN UNTUK MEMINIMALKAN BIAYA PERSEDIAAN INVENTORY LOTSIZING DECISIONS FOR MATERIAL REQUIREMENTS PLANNING TO MINIMIZE INVENTORY COSTS Filscha Nurprihatin. Rafie Djajasoepena. ,Vanessa Bertholdo Vargas. Moacyr Machado Cardoso Junior. Ali Vaezi. Department of Industrial Engineering. Sampoerna University. L'Avenue Building. Jl. Raya Pasar Minggu No. Kav. Pancoran. South Jakarta 12780. Indonesia Department of Information Systems. Sampoerna University. L'Avenue Building. Jl. Raya Pasar Minggu No. Kav. Pancoran. South Jakarta 12780. Indonesia Instituto Tecnolygico de Aeronautica. Praya Marechal Eduardo Gomes, 50 - Vila das Acacias. Syo Josy dos Campos - SP, 12228-900. Brazil Goodman School of Business. Brock University, 1812 Sir Isaac Brock Way. St. Catharines. Canada Diterima 06 Januari 2023 / Disetujui 12 Februari 2023 ABSTRACT Inventory control is one of the most important factors in achievingoptimal organizational Material Requirement Planning (MRP) is a common method used by businesses to manage This study focuses on a hydraulic firm that has been in operation since 2016. This research examines the planning of eleven components to get the best planning for the company. This study contributes to the integration ofMoving Average (MA) and Exponential Smoothing (ES) forecasting techniques alongside the MRP and three lot sizingtechniques, such as LFL. EOQ, and LUC. The minimum error valuesbetween MA and ES are evaluated and followed by the comparison between three lot sizingtechniques. The result shows that ES (=0. is selected as the best forecasting technique, and LUC presents the lowest total inventory cost. However. LUC is 05 percent lower than what LFL presents. A larger difference is shown by EOQ with 14. 57 percent higher than LUCwhich makes EOQ unlikely to be selected. Keywords: Inventory control. Material Requirement Planning. Forecasting techniques. Lot sizing techniques ABSTRAK Pengendalian persediaan merupakan salah satu faktor terpenting dalam mencapai kinerja organisasi yang optimal. Material Requirement Planning (MRP) merupakan metode yang umum digunakan oleh dunia usaha untuk mengelola persediaan. Penelitian ini berfokus pada perusahaan hidrolik yang telah beroperasi sejak Penelitian ini mengkaji tentang perencanaan sebelas komponen untuk mendapatkan perencanaan terbaik bagi perusahaan. Penelitian ini berkontribusi pada integrasi teknik peramalan Moving Average (MA) dan Exponential Smoothing (ES) bersama dengan MRP dan tiga teknik lot sizing, seperti LFL. EOQ, dan LUC. nilai error minimum antara MA dan ES dievaluasi dan dilanjutkan dengan perbandingan antara ketiga teknik lot Hasilnya menunjukkan bahwa ES (=0. terpilih sebagai teknik peramalan terbaik, dan LUC menyajikan total biaya persediaan terendah. Namun LUC hanya 0,05 persen lebih rendah dibandingkan LFL. Perbedaan yang lebih besar ditunjukkan oleh EOQ yang lebih tinggi 14,57 persen dibandingkan LUC sehingga membuat EOQ tidak mungkin terpilih. Kata Kunci: Pengendalian Persediaan. Perencanaan Kebutuhan Material. Peramalan. Lot Sizing *Korensponsensi Penulis: E-mail: filscha. nurprihatin@gmail. 28 | J I E M S INTRODUCTION Every organization will strive to achieve the objectives outlined in itsvision and In general, any business strives to maximize profit orminimizecosts. Many businesses have startedduring the present globalization era, including those involved in services, manufacturing, and commerce. As a result, firm rivalry becomes more intense across the industry, and all companies strive to establish strategies for their businesses so that they can compete both domestically and Nowadays, inventory control is one of the achievingoptimalorganizational performance. Inventory is the stock of any goods or resources used in a company or organization (Nurprihatin. Gotami, et al. , 2. Therefore, inventory decision is a critical part when it operations(Rembulan et al. , 2. Material Requirement Planning (MRP)is a common method used by businesses to manage inventories. Currently, the MRP method for ordering components has not yet been applied by the company. Beforeplanning the inventory, the company is required to predict demand data for commodities such as raw materials, semi-finished goods, and completed goods. The MRP methodis a logical approach that uses decision rules and computer-based transaction procedures to convert master production plans into net In this case, the demand for manufacturing products is classified into two types: independent demand and dependent This study focuses on a hydraulic firm that has been in operation since 2016. The Cylinder Wing Box is one product that has raw material availability issues. Several components encounter raw material excess and shortages, which can create delays in producing the product. In turn, the delay can increase the penalty cost due to tardiness(Nurprihatin et al. , 2. Therefore, planning on the products' components is required to avoidexcess materials and minimize unnecessary costs. 29 | J I E M S Eleven componentswere produced in 2020, and at the end ofeach month, all components encountered a shortage or excess of products. This research examines the planning of all components toget the best planning for the Moving average and Exponential Smoothing are used in forecasting to anticipate future demand, and then planning is carried out to achieve the lowest overall cost. MRP lotsizing decisions include the Least Unit Cost (LUC). Lot-for-Lot (LFL), and Economic Order Quantity (EOQ). The objective of this study is to establish whether theforecasting approach. Moving Average or Exponential Smoothing, has the minimum error value and should be employed. Furthermore, this study identifies the technique for identifying the lotsizingwith the lowest cost in the MRP method for each LITERATURE REVIEW To produce cheap, fast, and high-quality products,it is necessary to pay attention to supply chainmanagement(Andry et al. , 2023. Especially when it comes to product excess or shortages, the management should consider any tools to control the inventory. In short, inventory is one of the wastes that should be managed well (Tannady et al. , 2. Any data incorrectness from the inventory report could be a major driver(Andry et al. , 2023. The inventory model has been integrated into the vehicle routing problem to minimize the number of logistics costs(Rembulan et al. From an inventory perspective, several relevant costs should be considered, such as holding costs, ordering costs, and shortage In this study, ordering cost is assumed to focus on telephone and fax costs, because shipping and insurance costs are borne by the component supplier. Ordering cost can also be approximated by the fixed transportation cost is often incurred regardless of the size of the order (Chopra & Meindl, 2. A previous study discussed the transportation model to minimize the number of distribution costs (Nurprihatin & Tannady, 2. Furthermore, as part of the network models, previous studies developed the extension analysis that integrates location- routing decisions (Nurprihatin. Octa, et al. , considering the stochastic travel times (Nurprihatin. Elnathan, et al. , 2019. Nurprihatin & Montororing, 2. , logistics costs (Nurprihatin. Regina, et al. , 2. , and even constructed a new mathematical model (Nurprihatin & Lestari, 2. Table 1 represents the related works for this Previous studies utilized the Moving Average and Exponential Smoothing as the forecasting techniques(Conceiyyo et al. , 2021. Nurprihatin et al. , 2. MRP was also used to determine the proper time to order the items Table 1. Related Works Forecast Lot Sizing Techniques Authors Techniq LF EO LU (Nurpriha ARIMA Yes No Yes No tin et al. (Nurpriha Triple Yes No Yes No Exponen Gotami, et al. Smoothi (Nurpriha Moving No No No No tin et al. Average Exponen Smoothi (Conceiy Moving No No Yes Yes yo et al. Average Exponen Smoothi (Yao et No Ye No No , 2. This Moving Yes Ye Yes Yes Paper Average Exponen Smoothi METHODS 30 | J I E M S from suppliers (Nurprihatin et al. , 2022. Nurprihatin. Gotami, et al. , 2. Several lot sizing techniques have been compared between LFL (Yao et al. , 2. EOQ (Conceiyyo et al. Nurprihatin et al. , 2022. Nurprihatin. Gotami, et al. , 2. , and LUC (Conceiyyo et , 2. This study presents the Moving Average Exponential Smoothing forecasting technique alongside the MRP and three lot sizingtechniques, such as LFL. EOQ, and LUC. Data Collection Data collection was carried out in the form of inventory demand, holding cost, ordering cost, and order lead time. Data collection was carried out based on secondary data, which means that the data is provided directly by the company. Forecasting Forecasting is carried out to obtain forecasted future demand. Forecasting of historical data for the past 1 year using the Moving Average and Exponential Smoothing The limit on the Moving Average is used from period 2 to period 10, while the Exponential Smoothing used is from 0. 1 to Forecasting Error Measurement From the forecasting data that has been calculated, the Mean Absolute Deviation. Mean Square Error, and Mean Absolute Percentage Error are obtained. After that, a comparison is made of the error values for each type of forecasting for each component of the Cylinder Wing Box. The purpose of doing a comparison of error sizes is to get a method that has the lowest error value so that it can beused for component forecasting. Material Requirement Planning After the forecasting stage for each component and continuing to look for the smallest forecasting error value, the step proceeded to obtain the number of units for the coming period. The lot sizing techniques used in this research areLFL. EOQ, and LUC. Calculations on each component are expected to help solve problems in the company in the disadvantages and can minimize costs. LFL rule sets the production quantities to the requirements of each period (Thevenin et al. Economic Order Quantity Economic Order Quantity (EOQ) is one of the lot-sizing techniques to perform the MRP calculation(Nurprihatin. Gotami, et al. , 2. The EOQ formula is presented in Equation . ycIycI yaya. ycIycI yayayayayaya = = yaya. : Annual demandfor the product : Fixed cost incurred per order : Holding cost percentage : Cost per unit of product : Holding cost per unit per year RESULTS AND DISCUSSION Dependent Demand Table 2 shows the number of demands for each component of the Cylinder Wing Box. Holding cost, the price of each component,ordering cost, and lead time are shown in Table 3. 31 | J I E M S Table 2. Demands for Each Component of the Cylinder Wing Box Component Jan Feb Mar Apr May Jun Jul Aug Sep Oct Compact Seal 400 300 400 523 403 400 300 A154 25x33x55 400 300 400 522 401 400 300 DKB 25 . 160 550 400 522 400 400 300 ID 15x3 400 300 400 524 401 400 300 ID 44x33. 400 300 400 522 400 400 300 Bushing DU 25/28x20 400 300 410 522 406 400 300 Safety Pin Lock 200 800 700 800 1,000 700 1,000 1,044 800 800 600 Ring Plat Galvanize M20 800 700 800 1,000 700 1,000 1,044 800 800 600 M18x2. 400 350 400 522 400 400 300 Mur M20x1. 400 350 400 522 400 400 300 Nipple Grease M6x10 800 700 800 800 700 1000 1,144 800 800 600 Source: Primary Data Total Surplus/Shortage 4,082 4,077 4,086 4,075 4,072 4,096 1,342 8,244 8,436 8,244 3,036 4,122 4,122 8,144 Table 3. Relevant Costs and Lead Time Component Price (IDR/Uni. Holding Cost (IDR/Unit/Yea. Ordering Cost (IDR/Orde. Lead Time (Day. 3,966. Compact Seal 39,663 10,000 1,371. A154 25x33x55 13,711 10,000 DKB 25 . 7,362 10,000 ID 15x3 10,000 ID 44x33. 10,000 1,050. Bushing DU 25/28x20 10,500 10,000 Safety Pin Lock 200 1,100 10,000 Ring Plat Galvanize M20 10,000 M18x2. 2,600 10,000 Mur M20x1. 2,750 10,000 Nipple Grease M6x10 2,600 10,000 Source: Primary Data 32 | J I E M S Table 4. Forecasting for Safety Pin Lock 200 MAPE Forecasting MAD MSE (%) MA . Perio. 50 33,663. MA . Perio. 48 33,562. MA . Perio. 17 34,466. MA . Perio. 08 35,508. MA . Perio. 50 35,641. MA . Perio. 86 28,390. MA . Perio. 50 34,180. MA . Perio. 33 62,167. MA . Perio. 33 62,167. ES ( = 0. 00 23,820. ES ( = 0. 44 25,367. ES ( = 0. 95 26,625. ES ( = 0. 28 27,654. ES ( = 0. 13 28,626. ES ( = 0. 99 29,727. ES ( = 0. 18 31,112. ES ( = 0. 83 35,156. ES ( = 0. Source: AuthorsAo Own Calculations Based on Primary Data Forecasting Results Forecasting is done using the Moving Average method with limits from period 2 to period 10, while Exponential Smoothing with an value from 0. 1 to 0. Forecasting is calculated to obtain the MAD. MSE, and MAPE values as a consideration in each forecasting method. For example. Table 4 shows the result of forecasting for Safety Pin Lock 200. The smallest MAD. MSE, and MAPE values are 130. 002, 23820. 9, and 90%, respectively, represented by the Exponential Smoothing ( = 0. As a summary, the lowest errors among Moving Average and Exponential Smoothing forecasting for all cylinder wing box components are shown in Table 5. MRP Based on LFL Lot Sizing The calculation result based on LFL is shown in Table 6. Table 6 only shows the calculation results for Safety Pin Lock 200, just for the example. After calculating the MRP using the LFL method, the total cost of inventory is obtained, as shown in Table 7. As a summary, the calculation for all components to obtain the total cost based on LFL has been solved. The total cost for all Cylinder Wing Box components using the LFL lot sizing is IDR 34,853,498, as shown in Table Table 5. Forecasting Results for Components of Cylinder Wing Box Forecasting Component Methods Compact Seal ES ( = 0. A154 25x33x55 ES ( = 0. DKB 25 . MA . Perio. ID 15x3 ES ( = 0. ID 44x33. ES ( = 0. Bushing DU 25/28x20 ES ( = 0. Safety Pin Lock 200 ES ( = 0. Ring Plat Galvanize M20 ES ( = 0. M18x2. ES ( = 0. Mur M20x1. ES ( = 0. Nipple Grease M6x10 ES ( = 0. Source: AuthorsAo Own Calculations Based on Primary Data Table 6. LFL Lot Sizing for Safety Pin Lock 200 Day Gross Requirement On-hand Inventory Net Requirement Planned Order Receipts Planned Order Release Source: AuthorsAo Own Calculations Based on Primary Data Table 7. Total Costfor Safety Pin Lock 200 (LFL) 33 | J I E M S Day Purchasing cost (IDR) 223,300 223,300 223,300 Holding cost (IDR) Ordering cost (IDR) 10,000 10,000 10,000 Source: AuthorsAo Own Calculations Based on Primary Data Relevant Cost Table 8. Total Inventory Cost Based on LFL LotSizing for Each Component Total Cost No. Component (IDR) Compact Seal 16,103,515 A154 25x33x55 5,579,244 DKB 25 . 2,616,700 ID 15x3 350,310 ID 44x33. 108,913 Bushing DU 25/28x20 4,292,500 Safety Pin Lock 200 934,300 Ring Plat Galvanize 472,516 M20 M18x2. 1,095,600 10 Mur M20x1. 1,156,500 11 Nipple Grease M6x10 2,143,400 Total 34,853,498 MRP Based on EOQ Lot Sizing Based on Equation . , the EOQ value is the following: cIycI) . yayayayayaya = = yaya yayayayayaya = 1387 ycycycycycycycycycyc 224,400 10,000 Total Cost (IDR) 934,300 shows the calculation for the Safety Pin Lock as an example. After calculating the MRP using the EOQ method, the total cost is obtained. The total costs incurred in carrying out inventory can be seen in Table 10. As a summary, the EOQ lot sizing performance comes with the total cost for all components, which is IDR 39,910,259, as shown in Table 11. MRPBased on LUC LotSizing Table 12 represents the summary of the gross requirement for Safety Pin Lock 200 and is used as the basis for the MRP calculation. After performing the LUC calculation, the total costs are obtained as shown in Table 13. Based on the results shown in Table 13, the MRP calculation is performed. Table 14 represents the results of MRP based on LUC lot sizing. The total costs incurred in carrying out inventory can be seen in Table 15. As a summary, the total cost for all components based on LUC calculations is shown in Table To conclude. Table 17 shows the comparison of total inventory cost for each lot It shows that LUC has the lowest total inventory cost. However. LUCis only 0. percent lower than what LFL presents. A larger difference is shown by EOQ with 14. 57 percent higher than LUC. The calculation for MRP based on EOQ value is represented in Table 9. Table 9 only Table 9. EOQ Lot Sizing Safety Pin Lock 200 Day Gross Requirement 1,184 On-hand Inventory Net Requirement 1,387 Planned Order Receipts 1,387 Planned Order Release Source: AuthorsAo Own Calculations Based on Primary Data Table 10. Total Cost for Safety Pin Lock 200 (EOQ) 34 | J I E M S Cost (IDR) 894,300 40,000 Day Purchasing cost (IDR) 223,300 223,300 223,300 Holding cost (IDR) 130,240 107,910 85,580 Ordering cost (IDR) 10,000 10,000 10,000 Source: AuthorsAoOwn Calculations Based on Primary Data Relevant Cost 224,400 63,140 10,000 Cost (IDR) 894,300 186,870 40,000 Total Cost (IDR) 1,291,170 Table 11. Total Inventory Cost Based on EOQ Lot Sizing for Each Component No. Component Total Cost (IDR) Compact Seal 17,176,315 A154 25x33x55 6,476,912 DKB 25 . 2,980,567 ID 15x3 601,976 ID 44x33. 231,000 Bushing DU 25/28x20 4,875,200 Safety Pin Lock 200 1,291,170 Ring Plat Galvanize M20 757,513 M18x2. 1,465,740 10 Mur M20x1. 1,529,925 11 Nipple Grease M6x10 2,523,940 Total 39,910,259 Gross Requirement Source: Primary Data Table 12. Gross Requirements for Safety Pin Lock 200 Period Table 13. LUC LotSizing for Safety Pin Lock 200 Iterations Period 1 and 2 and 3 and 10,000 10,000 Holding Period (Perio. Holding Cost (IDR) 22,330 Total Cost (IDR) 10,000 32,330 Unit Cost (IDR) Selected Discarded 10,000 10,000 22,330 10,000 32,330 Selected Discarded 10,000 10,000 22,440 10,000 32,440 Selected Discarded 10,000 10,000 Selected Cumulative Demand Ordering Cost Source: AuthorsAo Own Calculations Based on Primary Data Table 14. LUC Lot Sizing for Safety Pin Lock 200 Day 35 | J I E M S Remarks Gross Requirement On-hand Inventory Net Requirement Planned Order Receipts Planned Order Release Source: AuthorsAo Own Calculations Based on Primary Data Table 15. Total Cost for Safety Pin Lock 200 (LUC) Day Cost Relevant Cost (IDR) Purchasing cost (IDR) 223,300 223,300 223,300 224,400 894,300 Holding cost (IDR) Ordering cost (IDR) 10,000 10,000 10,000 10,000 40,000 Source: AuthorsAo Own Calculations Based on Primary Data Table 16. Total Inventory Cost Based on LUC Lot Sizing for Each Component Total Cost No. Component (IDR) Compact Seal 16,103,515 A154 25x33x55 5,579,244 DKB 25 . 2,616,700 ID 15x3 345,864 ID 44x33. 94,094 Bushing DU 25/28x20 4,292,500 Safety Pin Lock 200 934,300 Ring Plat Galvanize 472,516 M20 M18x2. 1,095,600 10 Mur M20x1. 1,156,500 11 Nipple Grease M6x10 2,143,400 Total 34,834,233 Table 17. Comparison on Total Inventory Cost for Each Lot Sizing No. Lot Sizing Total Cost (IDR) LFL 34,853,498 EOQ 39,910,259 LUC 34,834,233 CONCLUSION Forecasting is conducted on the cylinder wing box components using the moving average and exponential smoothing methods using a tool in the form of QM for Windows, the forecast results for each component have a value of MAD (Mean Absolute Deviatio. MSE (Mean Square Erro. , and MAPE (Mean Absolute 36 | J I E M S Total Cost (IDR) 934,300 Percentage Erro. ) the smallest among other exponential smoothing methods with =0. there are Compact Seals . A15425x33x55 . ID 15x3 . ID 44x3. Bushing DU 25/28x20 . Safety Pin Lock 200 . Ring Plat Galvanize M20 . M18x2. Nut M20x1. Nipple Grease M6x10 . , and the Moving Average method with 2 periods, namely DKB 25 . The suitable method for planning MRP with the smallest planning cost for each component of the Cylinder Wing Box includes Compact Seal getting the LUC method LFL with a value of IDR 16,103,515. A154 25x33x55 getting the LUC method, and LFL with a value of IDR 5,579,244. DKB 25 get the LUC method and LFL with a value of IDR 2,616,700. ID 15x3 get the LUC method with a value of IDR 345,864. ID 44x3. 5 get the LUC method with a value of IDR 94,094. Bushing DU 25/28x20 get the LUC method and LFL with a value of IDR 4,292,500. Safety Pin Lock gets the LUC method and LFL with a value of IDR 934,300. Ring Plat Galvanize M20 gets the LUC method and LFL with a value of IDR 472,516. M 18x2. gets the LUC method and LFL with a value of IDR 1,095,600. Mur M20x1. 5 gets the LUC method and LFL with a value of IDR 1,156,500. Nipple Grease M6x10 gets the LUC and LFL methods with a value of IDR 2,143,400. This paper considers the total cost to determine the best MRP method between three lot sizing techniques: LFL. EOQ, and LUC. The total cost for the LFL. EOQ, and the LUCmethod is IDR 34,853,498. IDR 39,910,259, IDR 34,834,233, Therefore, the LUC method is the best method to minimize the inventory cost so that the companydoes not experience excess or shortage of components. Further research can includeshortage cost that is known as the result of external and internal disruption of supply. It is also recommended to filter the items into several categories using ABC analysis (Thazin & Sakulbumrungsil. Therefore, only significant items are discussed further. REFERENCES