EOQ-Based Raw Material Inventory Control at Mie Jebew Using POM-QM

Abstract

This study aims to analyze raw material inventory control at Mie Jebew and determine the most economical order quantity to minimize inventory costs. The research problem arises because raw material procurement is still based on the owner's estimation, potentially resulting in overstocking or stock shortages. This research employed a descriptive quantitative approach using primary data collected through direct interviews with the business owner. Data were analyzed using the Economic Order Quantity (EOQ) and Reorder Point (ROP) methods with the assistance of POM-QM for Windows software. The findings indicate that the implementation of the EOQ method determines the optimal order quantity, reduces the ordering frequency from 52 times to approximately 4–15 times per year depending on the characteristics of each raw material, and produces more economical inventory costs. In addition, the EOQ method balances ordering and holding costs, ensuring the availability of raw materials without creating excessive inventory. The results imply that the implementation of EOQ improves inventory control efficiency, supports production continuity, and provides a reliable basis for procurement decision-making. Furthermore, the Reorder Point (ROP) calculation identifies the appropriate time for reordering, thereby minimizing the risk of stockouts and maintaining raw material availability throughout the production process. This study provides practical implications that the implementation of EOQ and ROP can enhance inventory management efficiency, support production continuity, and improve operational decision-making for micro, small, and medium enterprises (MSMEs).