Inventory control using ABC and min-max analysis on retail management information system

Abstract

Abstract Determination of reorder point aims to meet the safety stock. This is a central parameter of inventory control. This study aims to find reorder point based on goods classification and safe stock. This approach is implemented in retail information systems that have been running. The information system has about 15.000 active items with the number of sales transactions around 1.100 per day. The problem in determining the reorder point is the unavailability of the safe stock reference. Lack of safe stock information triggered the ordering goods error. This error causes over stock. It can increase the potential of expired goods. In this study the researcher classifies the goods and determines the amount of safe stock to control the inventory. We used ABC analysis method for goods classification. It divides the group of goods into A, B, C, and D. The amount of safe stock is determined based on the goods sale’s history using Min Max Analysis method. Classification result is used to determine the limits on the inventory of allowed items to be ordered. Limitation safety stock amount refers to the limits from the min max method result. While, testing is done by comparing cost before and after implementation of this method.