Reducing Pertamax Inventory Costs at a Gas Station by Eliminating Shortage Using Probabilistic Economic Order Quantity Sono, Andian Ari Istiningrum, and Dwi Nurma Heitasari
Politeknik Energi dan Mineral Akamigas
Abstract
The demand of Pertamax at Gas Station Z was fluctuating. Thus, it often contributed to some customers^ failure to get the product at the right time. In addition, the station was not prepared with a sufficient safety stock for such demand, so the risk of shortage was quite high. This study aimed to reduce the product inventory costs and prevent the risk of shortage by determining the optimum order quantity and re-ordering time. Probabilistic Economic Order Quantity, was used to determine optimal order quantity, safety stock, and reorder point. Data on demand, lead time, purchasing cost, ordering cost, carrying cost, and shortage cost were processed using spreadsheet and Minitab to make a forecast. Finally, total inventory cost was determined. The result showed that the model using Probabilistic Economic Order Quantity has potentially enabled gas station to reduce the total inventory cost up to 83.88%.It is advisable that Probabilistic EOQ model be used for inventory control at the gas station to reduce the inventory cost by eliminating cost due to product shortage.