Proposed Forecasting and Inventory Management System to Reduce Out of Stock: A Case Study of Distributor of Agricultural Product
Kiagus Muhammad Amris Amrullah (a*), Gatot Yudoko (a)

(a) School of Business and Management, Bandung Institute of Technology
Jalan Gelap Nyawang No. 1, Bandung 40132, Indonesia
*kiagusmuhammad_amrisamrullah[at]sbm-itb.ac.id

Abstract

A distributor of agricultural products sells rockwool which is imported from Netherlands. The problem faced by the distributor is the product that is often out of stock resulting in reduced service level to customers. The objective of this research is to overcome out of stock from rockwool products by proposing forecasting and inventory management system. The method used is by comparing 8 time series analysis methods based on the last 3 years and comparing 3 models of the inventory management system based on the last 1 year. Forecast method is determined based on the smallest forecast error and inventory management system is determined based on a model that is applicable to the company. Result showed that simple exponential smoothing with alpha of 0.38 was chosen as forecast method and fixed order quantity model was chosen as inventory management system. Besides ensuring stock availability, this result also provides cost savings.

Keywords: Out of Stock- Demand Forecasting- Inventory Management- Warehouse

Topic: Innovation, IT, Operations and Supply Chain Management