Designing Inventory Models to Minimize Total Inventory Costs by Using Mixed Integer Linear Programming (MILP) in the Warehouse of MRO Materials

• Published in: IOP conference series. Materials Science and Engineering 2020-12, Vol.1003 (1), p.12100
• Main Authors: Kusuma, R I, Hakim, I M
• Format: Article
• Language: English
• ISSN: 1757-8981; 1757-899X
• DOI: 10.1088/1757-899X/1003/1/012100

In this study, the problem that happen in the object of research is the company's target which is Inventory Turn Over. These problems occur because the companies tend to decide to store materials in large quantities so there is no potential for material shortages that can disrupt maintenance activities. However, the large amount of storage creates risks such as high holding costs and the risk of damage. One way to solve inventory management problems is to make efficient decisions on order quantity (Q) and message time (T) so that a minimum total inventory cost is obtained without hampering maintenance activities. To achieve that, the method used in this study is ABC classification to determine the material classification that needs to be prioritized and Mixed Integer Linear Programming (MILP) to get a minimum total inventory cost. From this research, it is known that there are 9 types of materials that fall into category A out of 150 types. In addition, the total quantity of order (Q) and order time (T) results of the model is able to minimize the total inventory cost to IDR127,610,000