Inventory Control Of Fertilizers For Cost Efficiency At Cv Jago Subur

Abstract

This research is motivated by excess inventory leading to increased storage costs. The larger the accumulated inventory, the higher the cost per unit incurred. This study aims to identify inventory control, analyze storage capacity and inventory costs, develop more efficient inventory control strategies, and analyze inventory control cost efficiency. The methods used are Lagrange Multiplier and Min-Max. The results of the study indicate that the Min-Max method tends to maintain higher stock levels to anticipate demand fluctuations and procurement time uncertainties, even though fertilizer prices remain stable as determined by the producer's policy. Conversely, the Lagrange Multiplier method can optimize the quantity and frequency of orders based on warehouse capacity constraints, reducing total inventory costs by 19.35% compared to the previous method. This study demonstrates that the Lagrange Multiplier method is more effective in managing fertilizer inventory at CV Jago Subur compared to the Min-Max method. The advantage of this research lies in the discussion of inventory cost efficiency through a detailed comparative analysis between two different methods. This research makes a significant contribution to fertilizer inventory management by improving distribution efficiency, reducing inventory costs, and increasing company profits.