8th North America Conference on Industrial Engineering and Operations Management

Application of MRP and MILP Methods to Prevent Material Shortages in the Gold Jewelry Industry

Sekar Nadiyah & Teuku Yuri M. Zagloel
Publisher: IEOM Society International
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Track: Production Planning and Management

Along with the development of the Indonesian industrial sector, business competition is increasing, thus demanding increased efficiency in all fields. With this system, one method to accomplish this is through good inventory control planning, which ensures that the production process runs smoothly and that client expectations are satisfied on time and without delay. By utilizing the Material Requirement Planning (MRP), Mixed Integer Linear Programming (MILP) and Reverse Logistics Methods, this study assists firms in avoiding the danger of excess or shortage of raw materials. Using these approaches, the company can avoid the problem of raw material shortages. The study will use data from February to April 2022. Based on the research results, optimal results were obtained in planning gold supplies, namely the MRP method with a yield of 51,396 kg, followed by the Exponential Smoothing method with a yield of 36,467 kg and the MILP method with a yield of 30,983.7 kg. As for the large effective gold stock, modeling mathematics can be used to minimize total production costs. As a result, production costs were reduced by IDR 600,000,000.00.

Published in: 8th North America Conference on Industrial Engineering and Operations Management , Houston, United States of America

Publisher: IEOM Society International
Date of Conference: June 13-15, 2023

ISBN: 979-8-3507-0546-1
ISSN/E-ISSN: 2169-8767