5th European International Conference on Industrial Engineering and Operations Management

Optimizing Inventory Management in Micro Small Medium Enterprise (MSME) Using Material Requirement Planning (MRP)

Tania Marcella Tarigan
Publisher: IEOM Society International
0 Paper Citations
Track: Production Planning and Control

The current business climate of increasing competition implies that all companies need to be as efficient as possible at every level, which includes inventory management. To have adequate quantities of high quality inventory available is basically the goal of every company in running their business, this is why inventory management is crucial. In addition to it, a well inventory management is also able to help companies minimize the costs of carrying inventory which leads to the service and profit optimization. Thus, the implementation of inventory management should be considered in every business scale, including Micro, Small and Medium Enterprise (MSMEs). Investigating the effectiveness of inventory management in MSMEs is way important since the existence of MSMEs itself has a big contribution to the growth of Indonesia’s national gross domestic product. The purpose of this study was to optimize inventory management in a MSMEs in Indonesia, Warung Nasi Uduk Cani, by applying Material Requirement Planning (MRP) method for the production process. The use of this MRP method is intended for increasing Warung Nasi Uduk Cani’s efficiency of its material procurement in order to fulfill the customer demand in the right amoung and at the right time. The MRP will be built based on the owner’s financial record and bill of material. The results of the discussion show that MRP can help adjust fluctuation in demand, reduce waste, prevent shortages, increase cost efficiency and more accurate estimates of material requirements and ordering schedule.

Published in: 5th European International Conference on Industrial Engineering and Operations Management, Rome, Italy

Publisher: IEOM Society International
Date of Conference: July 26-28, 2022

ISBN: 978-1-7923-9161-3
ISSN/E-ISSN: 2169-8767