Inventory control of frame materials using EOQ, safety stock, and reorder point at PT Sharp Semiconductor Indonesia

Abstract

Raw material inventory control is essential for maintaining production continuity while minimizing inventory-related costs. This study aimed to optimize the inventory control of frame materials at PT Sharp Semiconductor Indonesia using the Economic Order Quantity (EOQ), Safety Stock, and Reorder Point (ROP) methods, and to evaluate inventory cost efficiency through Total Inventory Cost (TIC) analysis. A quantitative approach was employed using demand, ordering cost, holding cost, and lead time data collected from January to December 2025. The results indicate that the optimal order quantity is 249,870 units per order, reducing the ordering frequency from 34 to approximately six orders per year. The analysis also determined a Reorder Point (ROP) of 157,910 units and a Safety Stock of 67,540 units to maintain material availability during demand fluctuations and procurement lead times. Furthermore, implementing the proposed inventory policy reduced the annual inventory cost from IDR 109,171,421 to IDR 38,534,194, representing an inventory cost saving of approximately 65%. These findings demonstrate that integrating EOQ, Safety Stock, and ROP provides an effective inventory control strategy that improves cost efficiency while ensuring uninterrupted production continuity.