Inventory Planning of Supply Model Joint Economic Lot-Size

International Journal of Engineering and Science Vol. 3, No.
4, 2012
ISSN: 2086-3799
Available online at: www.ijes.co
2012 Universitas Malahayati Press
INVENTORY PLANNING OF SUPPLY MODEL JOINT ECONOMIC LOT-SIZE

Tiena Gustina Amran
Industrial Engineering Department, Trisakti University
E mail : tiena_amran@yahoo.com, tiena_inovasi@trisakti.ac.id
Abstract
Along expanding manufacturer industry in Indonesia dealing with competition to produce high
quality product and corporate profitability to survive and winning the competition. This research
conducted in part manufacturer supplier and otomotive component in stamping division that encourage
to lifter quality and optimal production cost. Planning of supply model which is proposed consist of 4
model of economic lot of size, that is Joint Economic Lot of Size pursuant to buyer ,Joint of Economic
Lot of Size pursuant to seller, Joint Economic Lot- Size and ,Joint Economic Lot - Size ( n*), and
under color of election pursuant to expense of supply of smallest alliance. Examination /conducted to
4 raw material and chosen supply model is Joint Economic Lot -Size ( n* integer) for all raw material ,
that block shoe anchor with raw material of SAPH 400 8,0 - 90 and got smallest expense together by 5
delivery times, and thrift counted 55.8% to used by company models, mounting support with raw
material of SAPH 400 6,0 - 533 with supply total cost together by 5 delivery times; rill, and thrift
counted 83.43 % to used company models, product of plate inner pressure with raw material of SAPH
400 3.2 - 545 with supply total cost by 5 delivery times; rill , and thrift counted 76.44 % to used
company models and outer pressure plate with raw material of SAPH 400 3.2 - 615 with supply total
cost by 4 delivery times; rill , and thrift counted 77.31 % to used company models.
KEYWORDS: Inventory, joint lot sized, economics value
1. Introduction
The competition in domestic manufacturer is very competitive one, this should be more stressing
the competition itself which has non domestic entries manufacturer who has strategy to getting
optimum profit in Indonesia. Dealing with this, one of the strategy is to leverage effectivity and
efficiency in each of activity according to compress production and operational cost. The research
client is a vendor of manufacturer otomotive component which is making of stamping products. This
company produced a lot kind of products like slio-8 in part of Mitsubishi Colt Diesel series, Lid Comp
Fuel Inlet in part of APV that produced by Indomobil Suzuki International, block shoe anchor,
mounting support, plate pressure inner dan plate pressure outer which are part of Yamaha motorcycle.
Stamping Plant division supplier company has purpose to leverage effectivity and efficiency at
each of manufacturing activities. The problem is a lot of wasting time in production floor. Based on
research report of GSPH (Grosss Struck Per Hour) that observed for 2 months indicated that 13%
wasting time had made and it is 78 minutes per day. The main cause of it are there no systematic
inventory planning, uncontrolled supply system, discontinuity production process, delay of delivery
that effect of customer trust.
The problems happened is how to compressed the costs related to inventory planning with
considering raw of material suppliers.
The goal of this research is assuming lot size production based on Joint Economic Lot Size model
considered miniimizing joint cost supply.
T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,
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International Journal of Engineering and Science Vol. 3, No. 4, 2012

ISSN: 2086-3799
2. Methodology and Material

A. Supply of System
Supply of system is mechanism of manage input related with supply to become output and needed
feedback to meet acertain standard. This mechanism is made of a number of policy that monitoring
supply level, assume stocks level, stocks loaded, and number of delivery. The system is designed to
setup and make guarantee end product, process product, component and optimal raw material, optimal
quantity and optimal time. The criteria of optimal are minimizing total cost related with supply which
is inventory cost, delivery cost and less supply cost [2]. .
B. Supply of System Cost
Supply cost is all expense and loss that caused by supply. The cost is purchasing cost, order
cost, setup cost, inventory cost and less supply cost [2].
1. Purchasing price is cost made to buy items, it is equivalent with price of buy.
2. Order cost is cost made to order to supplier but not influenced by number of ordered.
3. Set up cost is all expenses that caused in setup production. This cost would happened if the
item of supply made byself, not get from supplier.
4. Inventory cost is cost made to keep/maintain material, semi finished product, sub assembly, or
finished product.
C. Model Joint Economic-Lot Size for Buyer and Seller
According to Avijit Banerjee [1], in the condition of tansaction, about price, lot size etc has
mentioned along negotiation between buyer and seller. It depends on equilibirium, end of result in this
negotiation could be closed to optimal for both or one of them (the other side is loss) or nor of them.
The formula from Economic Lot Size (ELS) or Economic Order Quantity (EOQ) attached to Harris
by Hadley and Within, it is known and used in concept of buying and inventory management. Since
the beginning, the formula from ELS has been improved to get easier apllicated for any kind of
conditition. Snyder showed validity of EOQ model with probabilistic demand; Jesse, Mitra and Cox
among others, broadened application from EOQ based on condition that caused inflation. But the main
problem with these approachment is a mistaken considering in economic in a whole ELS system for
another problem. Example, the used condition of buying is the seller produced a few inventory system
with gradually that ordered by buyers based on lot-for-lot. Besides the price, one of the important
thing is precisely lot size. It is clear that ELSs buyersin this item might wouldnt get optimal result for
the seller or buyer. Traditionally, question of price, lot size, etc made by negotiation between each
side. (Buffa give interesting discussion from structure power based in negotiation). The result of
policy negotiation is coled to optimal or not optimal to one of side which is other side treatmened by
substancial penalty; some of cases not optimal for both. Optimal policy could be adapted through
cooperation that make profit for both. Maybe in the beginning, would involved a several purchasing
cost for one of them, it might be over loss exchange from suitable of right price.
If buyer in gradually order a several item, Q, an inventory item from seller. With acceptance from
exist command, seller produced a few things that wanted from the item (example, seller follow lot-forlot policy). In the deterministic, we can assumed there is no other buyer in this item and single seller.
Figure 1 shows inventory planning time for both. Time, T, belongs to three components: t1
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representative needed time to deliver product that ordered from production lot setup, t2 is real
production time, and t3 is needed time to deliver all of lot to buyers.
Fig 1 : Inventory Planning
Time to purchasers and vendors
In the reality, it is more complicated. For example, in just-in-time (JIT), buyers can choose smaller
lot size, and it is possible for them to looking another resources that can supply their requirements.
Seller might be meet demands with decrease setup cost with technology. Another cases if one of the
seller knowing there is no other counterpart, in this situation the supplier might be on the position to
get the unconsidered profit.
The next is effect of analyze from optimazion individual from buyers and vendors, this concept
improved from JELS model and economic implication included. Here with simple calculation to figure
the model and give a final description.
D. Effect of Independen Optimation
These is used notification:
D = yearly demand or using from item inventory
P = yearly production price to the item
A = demand cost from buyer
S = setup cost buyer per setup
i/r = yearly inventory cost, description dollar
Cv = production unit cost by seller
Cp = purchase unit cost by buyer
Q = order or lot size production in unit
As mentioned above to simplify it can be assumed that inventory cost, i, has identic value to buyer
and vendor.
In ELS, buyer and vendor are relative simple and known. The result from optimization
summarized in the table below:
Tab. 1 Summary from Relevant Cost and Individu Optimization Policy
Description
Purchaser
Vendor
DQ
DS
General
Cost
DA Q
TRCp (Q)
iCp
(2- TRCp (Q) Q 2 iCv
Function
4)
1)
Economic
Size
Lot
Qp*
2 DA
iCp
(2-
(2-
Qv*
2 PS
iCv
(2-
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2)
Minimum
Cost
Total
TRCp (Qp*)
2 DAiCp
5)
TRCv (Qv*)
(2-
3)
2 SiCv / P
(2-
6)
ELS from each side result(2-1) or (2-5) on table 1 geeting by duplicate function of main cost ((21) or (2-5)) with Q equivalent with zero. And then yearly total relevant cost (TRC) for each side ((23) or (2-6)) result from substitution between (2-2) or (2-5) become (2-1) or (2-4).
If ELS of buyer being adopted, than seller TRC is:
TRCv(Q
*
p
)=
Knowns as
TRCv(Q
*
p
)=
DS
[ 2 DA / iC p ]
1 / 2( )
( )
2 DA
iC p
DrC v
2P
TRCv(Q v )
(2-7)
Like mentioned before, to simplify, it can be assumed that i (inventory cost), declared as Rupiah,
has a same value even for buyer and vendor. In fact, inventory cost for both might be different. But
this assumption not take a loss for generally. If buyer and seller inventory cost declared by ip and iv,in
order have different value, parameter has general definition which is DrvCv/PrpCp and main result
that produced here cannot be exchange. The description from and can help description and
comprehent practice implication from several condition that connected with these parameters. If =
S/A, than, represented the ration from vendor setup cost for each setup (S) with buyer order cost
(A). and, (2-1) to table 2-1, buyer setup cost each year is DA/Q and from (2-4) setup total cost every
year is DS/Q. It is known that (DS/Q)/(DA/Q) = S/A = . In other words as a ratio from total setup
cost of buyer every year (or every period) to buyer order cosr each of year (or every period) to each of
lot size given. Because of that when vendor setup cost more than buyer order cost , consider to inline
and also right versa.
The same thing is inventory total cost from (2-4) is DQiCv/2P and from (2-1) inventory total cost is
QiCp/2. The common happened, if rv rp,
(DQivCv/2P)/(QrpCp/2) = DivCv/PipCp =
If iv = ip, DCv/PCp = . Thats why represented ratio of yearly inventory total cost (or every period) to
yearly inventory total cost to each of lot size given. Noticed if vendors production value, P, more than
deman price level D, consider relative small. Practice is , price of vendors production is high
because vendor need some time shorter to produce lot size given (example, interval t2 in figure 1
consider smaller). As a result, vendors inventory total cost consider lower and consequent, the value
relative lower to .
Parameter can be lower if vendors inventory unit cost (or variable of production) lower than
buyer inventory cost (or purchasing). So, it is worthed to predict that value of production is high than
the demand and/or inventory cost relative higher at buyer consider lower from and right versa.
E.
Effect From Vendors ELS to Buyer
For instance ELS of vendor is a number of order quantity, than with substitute result from
calculation (2-5-5) to (2-5-1), well have TRC of buyer is:
TRCp(Q *v ) = [1/2 ( + ) / () TRCp(Q
*
p
(2-8)
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From (2-2) and (2-5) and definition from and , can be show that:
Q *v =
( / )Q *p
(2-9)
And from (2-3) and (2-6)

*
TRCv(Q v =
( ) TRCp(Q
*
p
(2-10)
If > , when fix cost of both more than ratio of inventory cost, Qp < Qv. Another words, if ordered
*
*
cost relative lower and inventory cost relative higher, Q p < Q v (ELS vendor). In this condition,
adopted ELS vendor to pushed buyer to order a big number with time frequent more less , and than
could leverage inventory average and yearly total cost.Another parts, < telling that order cost
*
relative higher and inventory cost relative lower, which is it could be happened. In this case Q p (ELS
*
purchaser) more than Q v (ELS vendor). If ELS vendor being adopted, buyer would be pushed to
order a small number with more often frequent, so it could leverage order each year like also
increasing total cost.
In general condition, if the different bertween and bigger, adopted ELS from both replaced
other part that far away from their optimal position, and finally increase their penalty. Besides, if the
difference between and smaller, optimal position from buyer and vendor (related with each of lot
size cost) become closer. If = (for example, when there were the different at fixed cost of both
replaced with the different that same happened at inventory cost in the same direction), lot optimal size
is the same. Of course, in the condition that adopted ELS, one of part is wouldnt get penalty for the
other part.Theoritically, when = could get different situation. Value from closing unity (0< 1)
that could tell for vendor production value is approaching demand and also inventory unit cost at
vendor and purchaser is the same. Some of cases, when = could be closer if vendor fixed cost in
every setup is the same with buyer fixed cost each of order. Another part, if more smaller than 1, the
above condition is approached if order cost more than vendor setup cost. In practice, adopted one of a
policy would replace other part in the negative situation.
From (2-47), eventhough and is the same with minimum value of TRC vendor and minimum
value of TRC buyer not always the same (unless, =1). If 1, =1 could tell 1. Herewith, to
leverage vendor fixed cost balanced with inventory cost per unit that relative lower and/or value of
productionthat high rather than the demand, TRC as a result from a policy that optimal closing the
purchaser. In other words, when = 1 indicated that each of unbalanced fixed cost that have to both
can be replaced with unbalanced inventory cost in the reverse direction.In this case, their TRC (which
is the result from each of their optimal policy) has a real the same value. In fact, things like this more
often happened rather than situation which is lot size of both didnt same.
F.
Model Joint Economic-Lot-Size
Above has mentioned a weakness from each counterpart if adopting one of ELS. In this chapter
would have a description about model JELS for the first time. To purchaser and vendor joint TRC
(JTRC) for each of lot size y, Q produced with adding (2-1) and (2-2), shown like this :
JTRC(Q) = D/Q (S+A) + Q/2r (D/P Cv + Cp)
(2-11)
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With follow controlling function of cost that before is Q = Q j , we get JELS:

Q
With substitute Q
*
j
*
j
2 D( S A)
i ( D / P C v C p
(2-12)
to (2-48) than JTRC minimum per year is:

*
JTRC(Q j ) =
2 Di( s A)( D / P C v
CP
(2-13)
Calculation (2-49) can be rewrite become:
(1 ) /(1 ) Q *p .
(2-14)
(1 1 / ) /(1 1 / ) Q *v
(2-15)
Qj=
Also, from (2-9) and (2-11)
*
Qj=
With the same way, could be shown that:

*
JTRC(Q j ) =
And
*
JTRC(Q j ) =
(1 )(1 )
TRCp(Q
(1 1 / )(1 1 / )
*
p
TRCv(Q
(2-16)
*
p
(2-17)
.
The calculation (2-11) and (2-12) above showed the connection between JELS and ELS from
purchaser and vendor. Formula (2-15) and (2-16), in other words shows relationship between JTRC
optimal and optimal total cost.
*
*
*
*
*
Testing (2-13) and (2-14), very clear if = , Q j = Q p = Q v . Another side, if > , Q j < Q p
*
*
*
*
< Q v ; if < , Q v < Q p < Q j . Than, JELS represented compromise between ELS purchaser and
ELS vendor when the values not the same. This is maybe unbalance that needed like compromise, a
lot of cases, with a goal to decrease JTRC. Adopted TELS, with assesment price, could get a benefit
for both.
JTRC purchaser and vendor with optimal policy could have it, if ELS purchaser adopted, JTRC
could be seen
*
*
JTRC (Q p ) = [1+1/2( + )] TRCp (Q p )
(2-18)
That have it from (2-7) and (2-10). With the same way, using relation (2-45) and (2-47), JTRC to
adopt ELS vendor is
TJRC (Q
*
p
) = [1+1/2(1/ + 1/)] TRCv (Q *v )
...........
(2-19)
For make sure economic consequent of individu if adopt JELS, we need to get TRC buyer and
vendort who could get the result. Substituting result (2-13) become (2-1) and (2-14) to (2-4), in order
could get:
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1 1 / 2( )
*
JTRCp(Q j ) =
TRCp(Q
[(1 )(1 )
(2-20)
1 1 / 2(1 / 1 / )
and JTRCv(Q j ) =
TRCv(Q
(2-21)
[(1 1 / )(1 1 / )
G.
*
p
Model Joint Economic-Lot Size for Purchaser and Vendor
As described by S K.Goyal (1988), the assumption from lot for lot policy is basic. This is possible
for vendor to produce in a lot and distributed a few times delivering for purchaser. That way a number
of the ordered for purchaser is Q, and a quantity of production from vendor in a lot is Qn where n is a
repetitive number of delivering. Especially value from n, EOQ for purchaser and total cost of supply
can get it from :
S
2 D A
n
Cp Cv nCv 1
P
Q ( n)
1/ 2
S
JTRC (n) = 2 Di A
n
(2-22)
D
Cp Cv nCv 1
1/ 2
(2-23)
Economic value from n=n* get when

Z(n*) Z(n*-
Dan Z(n*) Z(n*-1)
(2-25)
(2-26)
With substituting (2-23),well get
n * ( n * 1
S Cp Cv
)
D
ACv 1
P
(2-27)
With substituting (2-24),we get
n * ( n * 1
S Cp Cv
)
D
ACv 1
P
(2-28)
And combined (2-24) dan (2-25) :
n * ( n * 1)
S Cp Cv
n * ( n * 1)
D
ACv 1
P
(2-29)
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EOQ purchaser ,Q(n*), get it from exchange n with n* from (2-21). And quantity of a lot for
vendor with times n* with Q(n*). And total minimum cost of supply got from (2-22) with axchange
value n with n* .
Total cost of supply for purchaser and vendor is
TRCp (Q (n*))
TRCv (Q( n*))
D. A
Q ( n*)
i
Cp
Q ( n)
2
Q( n*)
D. A
D
i
Cv n * 1 1
n * Q ( n)
2
P
TRCv (Q ( n*)) JTRC (n*) - TRCp(Q(n*))
(2-30)
(2-31)
(2-32)
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Fig. 2. Research Methodology
3. THE RESULT AND ANALYSIS

A. Inventory Model Economic Lot Size Block Shoe Anchor
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D = Annual Demand = 169777 unit

P = Speed of production vendor = 1200000 unit/year
A
= order cost
= Rp 5000
S
= setup cost
= Rp 125000
i
= holding cost percent = 5%
Cv
= raw material cost from vendor = Rp 2210
Cp
= selling price perunit buyer = Rp 5210
A.1. General Economic Lot Size
( known model )
1. Find Q, with:
D
frequent annual demand
169777
Q
4
Q 424444.25 42445
Q
Find inventory cost for purchaser with :

TRCp (Q )
D. A Q
rCp
Q
2
169777 * 5000 42445
0.05 * 5210
42445
2
TRCp (Q ) 5548460.9
TRCp (Q )
2. Find inventory cost for vendor with (2-41) :

DQ
DS
iCv
Q
2
169777 * 125000 169777 * 42445
TRCp (Q )
0.05 * 5210
42445
2
TRCp (Q ) 831775.92
TRCp (Q )
3. Find Total Joint Inventory cost :

JTRC = TRCp(Q) + TRCv(Q)
JTRC = Rp 5.548.460,9 + Rp 831.775,92
JTRC = Rp 6.380.236,8
A.2. Economic Lot Size Model Based on purchaser
1. Find Q optimal for ADW with formula :
Qp*
2 DA
iCp
2 * 169777 * 5000
0.05 * 5210
Qp* 2552,4876 2553
Qp*
2. Find inventory cost for ADW with Qp* = 2553, with formula :
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TRCp (Qp*) =
=Rp 665.033.1458
2 DAiCp
= 2 * 169777 * 5000 * 0.05 * 5210
3. Find inventory cost for Star Poly with Qp* = 2553 with formula (2-44) :
1 / 2( )
*
*
TRCv(Q p ) =
TRCv(Q v )
( )
With change become S/A and = D.Cv/P.Cp :
S DCv

0.5
A PCp
2 SiCv
TRCv (Qp*)
D
1/ 2
P
S DCv
A PCp
125000 169777 * 2210

5000
1200000 * 5210
TRCv (Qp*)
Rp 814.590.565
1/ 2
125000 169777 * 2210
5000 1200000 * 5210
0.5
TRCv(Qp*) = Rp 8.332.869.953
4. Find total joint annual inventory costwith Qp= 2553 unit is adding quantity result :
Inventory total cost with Qp :
JTRC(Qp*)
= TRCp(Qp) + TRCv(Qp)
= Rp 665.033.1458 + Rp 8.332.869.953
=Rp 8.997.903,099
A.3.Economic Lot Size Model Based on vendor
1. Find Q optimal for Star Poly with formula :
2 PS
Qv*
iCv
2 * 1200000 *125000
0.05 * 2210
Qv* 52105,01057 52106
Qv*
2. Find inventory cost for Star Poly with Qv*=52106,with formula :

2 SiCv
2 *125000 * 0.05 * 2210
TRCv (Qv*) D
169777
1200000
P
= Rp 814.590.565
3. Find inventory cost for ADW with Qv* = 52106,with formula :
*
TRCp(Q *v ) = [1/2 ( + ) / () TRCp(Q p )
With change become S/A and =
D.Cv/P.Cp, and by getting
TRCp(Qp) ,than we have:
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S DCv

A PCp
0.5
TRCp (Qv)
S DCv
A PCp
1/ 2
2 DAiCp
125000 169777 * 2210

5000
1200000 * 5210
TRCp (Qv)
Rp 665.033.1458
1/ 2
125000 169777 * 2210
5000 1200000 * 5210
0.5
TRCp(Qv) = Rp 6.802.969,438
4. Find total joint annual inventory costwith Qv*= 52106 unit is adding result :
Inventory total cost with Qv :
JTRC(Qv*) = TRCp(Qv*) + TRCv(Qv*)
= Rp 6.802.969,438+ Rp Rp 814.590.565
= Rp 7.617.560,003
A.4.Joint Economic Lot Size Model
1. Find Q joint with formula :
Qj*
2 D S A
D
i Cv Cp
P
2 * 169777 * 125000 5000

169777
0.05 2210
5210
1200000
Qj* 12643,15306 12644

Qj*
2. Find total joint annual inventory cost with Qj*=12644 unit, using formula :
2 Di( s A)( D / P C v C P
JTRC(Q j ) =
D

JTRC (Qj*) 2 Di S A Cv Cp
P
1/ 2
169777

JTRC (Qj*) 2 * 169777 * 0.05125000 5000 2210
5210
1200000
JTRC(Qj) = Rp 3.491.288,632
1/ 2
3. Find inventory cost for ADW with Qj*=12644 using formula :

1 1 / 2( )
*
JTRCp(Q j ) =
TRCp(Q
[(1 )(1 )
*
p
With change become S/A and = D.Cv/P.Cp, and getting TRCp(Qp) ,than we have :
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JTRCp (Qj*)
S
DCv
1 0.5
A PCp
S
1
A
2 DAiCp
D.Cv
1
P.Cp
125000 169777 * 2210

1 0.5
5000
1200000 * 5210
JTRCp (Qj*)
2 * 169777 * 5000 * 0.05 * 5210
125000
169777 * 2210
1
1
5000
1200000 * 5210
125000 169777 * 2210

1 0.5
1200000 * 5210
5000
JTRCp (Qj*)
665033.1458
125000
169777 * 2210
1
1
5000
1200000 * 5210
JTRCp(Qj*) = Rp1.713.952,765
4. Find inventory cost for Star Poly with Qj*=12644 using formula :
1 1 / 2(1 / 1 / )
JTRCv(Q j ) =
TRCv(Q v )
[(1 1 / )(1 1 / )
With change become S/A and = D.Cv/P.Cp, and getting TRCv(Qv) , than we have :
S DCv

1 0.5 1 /
2 SiCv
A PCp
JTRCv (Qj*)
D
P
D.Cv
S

1 1 /
1 1 /
A
P.Cp
JTRCv (Qj*)
125000 169777 * 2210

1 0.5 1 /
1200000 * 5210
5000
125000
5000
1 1 /
169777 * 2210
1 1 /
1200000 * 5210
169777
2 * 125000 * 0.05 * 2210

1200000
JTRCv(Qj*) = Rp 1.777.335,867
Or with substraction :
JTRCv(Qj*)
= JTRC(Qj*)-JTRCp(Qj)
= Rp 3.491.288,632- Rp1.713.952,765
= Rp 1.777.335,867
A. 5. Joint Economic Lot Size (n* integer) Model
1. Find n* using formula :
n * ( n * 1)
S Cp Cv
n * (n * 1)
D
ACv 1
P
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125000 5210 2210

n * (n * 1)
169777
5000 * 2210 1
1200000
n * (n * 1) 29.73037 n * (n * 1)
With change n from (1- ~), value of n* that suitable
n * (n * 1) 29.73037 n * (n * 1) , acquired
5(5+1) 29.73037 5(5-1)
30 29.73037 20,
n*=5 can be used because limit up and downthat relevant
n*= 6 than :
6(6+1) 29.73037 6(6-1)
42 29.73037 30,
n*=6 cannot be used becauseunrelevant limit up and down
2. Value of n*=5 is precisely value and then find Q(n*) with change variable n=n* than ADW order
sizes:
Change variable n=n*
n * (n * 1)
2 D A
n
Cp Cv n * Cv 1
P
Q(n*)
1/ 2
Q(5)
0.05
12500
2 * 169777 5000
169777
5210 2210 5 * 2210 1
1200000
1/ 2
10186620000
780.6681604
Q(5) 3613
1/ 2
Q(5)
3. Find Q or Star Poly lot size with times Q(n*) with n*:
Q = Q(n*) x n*
= 3613 * 5
= 18065
4. Find JTRC using formula :
substitute n=n* than :
JTRC (n*) =
S
D
2Di A Cp Cv nCv 1
n *
p
1/ 2
123

ISSN: 2086-3799
125000
JTRC(n*)= 2 * 169777 * 0.05 5000
JTRC (n*) = 509331000 * 15613.36 1 / 2

JTRC (n*) = Rp 2.819.994.662
169777
5210 2210 5 * 2210 1
1200000
1/ 2
5. Find TRCp (Q(n*)) using formula :

Q (n*)
D. A
TRCp (Q (n*))
i
Cp
Q (n*)
2
169777 * 5000
3613
TRCp (Q (n*))
0.05
5210
3613
2
TRCp(Q(n*)) = Rp 705.546,1977
6. Find TRCv (Q(n*)) using formula :
TRCv (Q(n*)) = JTRC(Q(n*)) TRCp(Q(n*))
= Rp 2.819.999,489 Rp 705.546.1977
= Rp 2.114.448,5
With the same way we would made Inventory Planning Model Economic Lot Size Mounting
support, Plate Pressure Inner, Plate Pressure Outer, Block Shoe Anchor
Tab. 2: Comparable Inventory Total Cost Block Shoe Anchor

General
ADW
Starpolly
Economic
Economic
Economic
Model
Description
Lot size
Lot Size Qp* Lot Size Qv*
Qj*
ADW order size (unit)
42445
2553
52106
12644
Starpolly Lot Size
(unit)
42445
2553
52106
12644
Purchasers Annual
Cost (Rupiah)
5548460.897 665033.1458
6802969
1713952.76
Vendors Annual Cost
(Rupiah)
831775.9219 8332869.953
814590.6
1777335.87
Total Joint Annual
Cost (Rupiah)
6380236.819 8997903.099
7617560
3491288.63
Model
Qj*(n*)
3613
18065
705546
2114448
2819995
As shown on table 2 above using inventory model Q(n*), Total Joint Annual Cost is smaller than
others models. In this model for one lot ordered, supplier do delivering for 5 times or n*=5.
Analysis Comparable Method Joint Cost Economic Lot-Size Model to Mounting Support
Processing data to find inventory model with smallest inventory cost for mounting support
product with raw material SAPH 400 6,0 -533, enhanced to the model that uised by company (general
model) and 4 inisiative model with using same datas which israw material requirement is 940949
124

ISSN: 2086-3799
unit, speed of production from starpolly 1200000 unit, cost per ordered 5000 rupiah , setup cost from
starpolly 125000 rupiah, raw material price 2765 rupiah, selling price 7019 rupiah ,interest 5% and
average of annual raw material demand is 4 times. To be found result Total Joint Annual Cost in each
of model
Table 3: Comparable Inventory Total Cost Plate Pressure Inner
Starpolly
General
ADW
Economic
Economic
Economic
Lot Size
Model
Description
Lot size
Lot Size Qp*
Qv*
Qj*
235238
5178
46575
23077
Starpolly Lot Size
(unit)
235238
5178
46575
23077
Purchasers Annual
Cost (Rupiah)
41298387.99
1817212.292
8273701
4253286.32
Vendors Annual Cost
(Rupiah)
13255117.03
22995915.08
5050758
6348097.34
Total Joint Annual
Cost (Rupiah)
54553505.01
24813127.37 13324459
10601383.7
Model
Qj*(n*)
6248
31240
1849367.96
7187098.683
9036466.643
As shown on table 3 above with inventory model Q*(n*), total joint annual cost is smaller than
Analysis Comparable Method Joint Cost Economic Lot-Size Model to Plate Pressure Inner
Processing data to find inventory model with smallest inventory cost for plate pressure inner
product with raw material SAPH 400 3.2 -545, enhanced with the model that company used (general
model) and 4 inisiative model with using same datas which is raw material requirement is 1127320
unit, speed of production from starpolly 1200000 unit, cost per ordered 5000 rupiah, setup cost from
starpolly 125000 rupiah, raw material price 1030 rupiah, selling price of product 2750 rupiah, interest
5% and average of raw material demand is 4 times. Than, we obtained result of total joint annual cost
in each model:
Table 4: Comparable of Inventory Total Cost Plate Pressure Inner
ADW
Starpolly
General
Economic
Economic
Economic
Lot Size
Lot Size
Model
Description
Lot size
Qp*
Qv*
Qj*
281830
9055
76324
39710
Starpolly Lot Size
(unit)
281830
9055
76324
39710
Purchasers Annual
Cost (Rupiah)
19395812.5 1245016.064 5321077 2871965.52
Vendors Annual Cost
(Rupiah)
7317582.781 15781736.78 3692583 4509244.56
Total Joint Annual
Cost (Rupiah)
26713395.28 17026752.84 9013659 7381210.08
Model
Qj*(n*)
10750
53750
1263397
5029159
6292556
As shown table 4 above with using inventory model Q*(n*), total joint annual cost is smaller than
125

ISSN: 2086-3799
Analysis method Joint Cost Economic Lot-Size Model to Plate Pressure Outer
Processing data for looking inventory model with the smallest cost for plate pressure outer
product with the raw material SAPH 400 3.2 -615, executed to model that used by company (general
model) and 4 inisiative model with using the same data which is requirement of raw material is
1127320 unit, speed of production from starpolly is 1200000 unit, cost per ordered 5000 rupiah , setup
cost starpolly is 125000 rupiahs, raw material cost is 1267 rupiah, selling price product is 3044
rupiah, bank of rate is 5% and average of raw material demand annualy is 4 times . So, we would get
result total joint annual costin every model is:
Tab. 5: Comparable of Inventory Total Cost Plate Pressure Outer
General
ADW
Starpolly
Economic
Economic
Economic Lot
Model
Description
Lot size
Lot Size Qp*
Size Qv*
Qj*
281830
8607
68816
37209
Starpolly Lot Size (unit)
281830
8607
68816
37209
Purchasers Annual Cost
(Rupiah)
21467263
1309878.254
5318781
2983018.26
Vendors Annual Cost
(Rupiah)
8886288.721
16629571.86
4095434
4894404.39
Total Joint Annual Cost
(Rupiah)
30353551.72
17939450.11
9414215
7877422.65
Model
Qj*(n*)
11868
47472
1378096
5508741
6886837
As shown in table 5 that using inventory model Qj*(n*), total joint annual cost is smaller than
others models. In this model for one lot ordered , supplier do delivering for 4 times or n*=4
CONCLUSION
Using of model joint economic lot size with n* integer makek the result supply cost be the smallest
than 4 model that used as inisiative and also to model that used by company for right now which is for
block shoe anchor with Q = 18065 with 5 times delivery, total cost of supply together is Rp2.819.995,
and to save 55.8% with the model that used by company, for mounting support with Q = 31240 with
5 times delivery, total cost of supply is Rp 9.036.466,643 and to save 83.43% with the model that
used by company. Second, for plate pressure inner with Q = 53750 with 5 times delivery, total cost of
supply is Rp 6.292..556 and to save 76.44% with the model that used by company. And the third, for
plate pressure outer with Q = 47472 with 4 times delivery, total cost of supply is Rp 6.886.837 and to
save 77,31% with the model that used by company, thats why this model is an inisiative supply of
model as inventory planning model for the next year.
REFERENCES
[1]. Banerjee,Avijit,(1986).A Joint Economic -Lot-Size Model For Purchaser And Vendor.
Decision Sciences.17; 292-311.
[2]. Baroto,Teguh,(2002).Planning and Control Produce. Ghalia Indonesia.Jakarta
126

ISSN: 2086-3799
[3]. Goyal,S.K,(1988). A Joint Economic-Lot-Size Model For Purchaser And Vendor:A

Comment. Decision Sciences.19;236-241
[4]. Makridakis,Spyrof, Steven C. Whellwryght,danVictor E.McGee, (1992). Forecasting
Application And Method Bind One. Second Edition. PT.Erlangga. Jakarta
[5]. Makridakis,Spyrof,Steven C. Whellwright , dan Victor E.McGee, 1994). Method of
Forecasting For the Application Management. Second Edition. PT.Erlangga. Jakarta
[6]. Saputri,Desi Ayu, (2006). Proposal of Production Planning And Planning of Requirement of
Raw Material of PT.SUCOFINDO Adiusaha. Trisakti University.Jakarta
[7]. Saraswati,Docki,Sumiharni Batubara, Inten Tedjaasih, (1998). Planning And Control
Produce. Jakarta: Industrial Engineering, Trisakti University.
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International Journal of Engineering and Science Vol. 3, No.

INVENTORY PLANNING OF SUPPLY MODEL JOINT ECONOMIC LOT-SIZE

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

2. Methodology and Material

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Fig 1 : Inventory Planning

Time to purchasers and vendors

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Effect From Vendors ELS to Buyer

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

And from (2-3) and (2-6)

Model Joint Economic-Lot-Size

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

With follow controlling function of cost that before is Q = Q j , we get JELS:

to (2-48) than JTRC minimum per year is:

Calculation (2-49) can be rewrite become:

With the same way, could be shown that:

) = [1+1/2(1/ + 1/)] TRCv (Q *v )

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Model Joint Economic-Lot Size for Purchaser and Vendor

Economic value from n=n* get when

Dan Z(n*) Z(n*-1)

With substituting (2-23),well get

With substituting (2-24),we get

And combined (2-24) dan (2-25) :

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Total cost of supply for purchaser and vendor is

TRCv (Q( n*))

TRCv (Q ( n*)) JTRC (n*) - TRCp(Q(n*))

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Fig. 2. Research Methodology

3. THE RESULT AND ANALYSIS

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

D = Annual Demand = 169777 unit

Find inventory cost for purchaser with :

169777 * 5000 42445

2. Find inventory cost for vendor with (2-41) :

3. Find Total Joint Inventory cost :

International Journal of Engineering and Science Vol. 3, No. 4, 2012

= 2 * 169777 * 5000 * 0.05 * 5210

125000 169777 * 2210

2. Find inventory cost for Star Poly with Qv*=52106,with formula :

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

125000 169777 * 2210

2 * 169777 * 125000 5000

Qj* 12643,15306 12644

3. Find inventory cost for ADW with Qj*=12644 using formula :

International Journal of Engineering and Science Vol. 3, No. 4, 2012

125000 169777 * 2210

125000 169777 * 2210

125000 169777 * 2210

2 * 125000 * 0.05 * 2210

T.G. Amran. / Int. J. Eng and Sci, Vol.3, No.4, 2012,

International Journal of Engineering and Science Vol. 3, No. 4, 2012

Dan Z(n) Z(n-1)

TRCv (Q ( n)) JTRC (n) - TRCp(Q(n*))

JTRC(n)= 2 169777 * 0.05 5000

JTRC (n) = 509331000 15613.36 1 / 2