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Research Paper | Management | Indonesia | Volume 4 Issue 4, April 2015

An Analysis of Transformer Raw Materials Planning by Using Lot Sizing Technique (A Study Case of PT. XYZ Indonesia)

Suri Nur Rachmawati | Khairani Ratnasari Siregar ^[3]

Abstract: Global market of world electrical equipment has increased year by year. However, the fluctuated cost of raw materials can become an obstacle for the market development. PT. XYZ as one of electrical equipment companies needs a strategy of raw materials planning to meet the market demand which is expected to continue to grow. This study aims to analyze the raw material planning one of the company's products, namely transformer, which is able to save the total cost of inventory using lot sizing techniques. The method used is descriptive quantitative research. This study illustrates and compares several lot sizing techniques and its compliance with the conditions of the company. The conducted analysis shows among several lot sizing techniques mentioned, namely Lot for Lot (LFL), Economic Order Quantity (EOQ), Least Total Cost (LTC), Least Unit Cost (LUC), Part Period Balancing (PPB), and Wagner Within algorithm, lot sizing techniques which can be implemented in a company are lot for lot and Wagner Within algorithm. The research result shows that Wagner Within algorithm is the most suitable lot sizing technique in the transformer-s raw materials planning. Wagner Within algorithm is able to produce the lower inventory cost compared to lot for lot technique can do and save total cost saving ranges from 12 until 62 percent.

Keywords: Inventory Cost, Lot for Lot LFL, Lot Sizing Technique, Material Planning, Wagner Within Algorithm

Edition: Volume 4 Issue 4, April 2015,

Pages: 1100 - 1104

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