Track: Inventory Management

Abstract

This paper presents the results of developing  models  to determine the size of material ordering by considering life time and minimum order quantity (MOQ). This topic was inspired by real problem at an aerospace company located in Bandung. The faced real problem is how to minimize waste in material procurement due to short of material life time and minimum order quantity from suppliers. The waste is caused by a lot of unused material (eventualy expired and causing high expired cost), added with high of ordering costs, storage costs and stockout costs. Until now the authors have not found the appropriate model. On the basis the authors developed or modified a new model.  The developed model is deterministic category by  assumption of material demand, lead time and costs involved are considered fixed or unchanged. The developed model are combination between optimal and heuristic approach. The developed model will get optimal solution when the normal situation faced, but for the specific situation the best solution will be found by heuristical approach.

Authors believe this research will be very useful for companies, as well as for scientific development related to optimization in the field of inventory control and material management.

Keywords:

Life time, expired cost, minimum oder quantity.