Optimization of Coffee Raw Material Inventory Control Using Continuous Review Method with Particle Swarm Optimization (PSO) (Case Study at PT Harta Mulia, Blitar)
Usman Effendi, Mas^ud Effendi, Arif Hidayat, Muhammad Arif Kamal, Farras Nafisa*

Department of Agroindustrial Technology, Faculty of Agricultural Technology, University of Brawijaya Jl. Veteran No. 1, Malang 65145, Indonesia
*farrasnafisa[at]student.ub.ac.id

Abstract

The consumption of ground coffee in Blitar reached 0.170 tons in 2022 and increased by 29.4% to 0.220 tons in 2023. This growth in consumption presents a significant opportunity for ground coffee producers to expand their market and increase sales. PT Harta Mulia, a company engaged in the production of ground coffee located in Blitar Regency, currently meets its raw material needs through a procurement system that often risks running out of stock or overstocking. Therefore, optimizing raw material inventory control is essential to prevent both shortages and overstocking, thereby minimizing total inventory costs. This study applies a continuous review system and Particle Swarm Optimization (PSO) method to determine the optimal order quantity and reorder point. The optimization of these two variables is conducted using the PSO algorithm to obtain the best solution that minimizes total inventory costs. PSO parameters-including the number of particles, acceleration coefficients for pBest and gBest, inertia weight, and maximum velocity-are tested to determine the most effective parameter combination for achieving the optimal solution.
The inventory control optimization using PSO in this study yields an optimal order quantity of 2,608.8 kg and an optimal reorder point of 339.2 kg, reducing the total annual inventory cost to IDR 3,824,673,359.52. This solution is achieved using the following PSO parameters: 250 particles, inertia weight of 0.5, acceleration coefficients of 2.5 for both pBest and gBest, and a maximum velocity of 850. The optimization results in a total inventory cost reduction of 22.89%, with a 45.89% decrease in holding costs.

Keywords: continuous review system, inventory control, PSO

Topic: Agro-industrial system management and regulation