FINAL PROJECT

THE ANALYSIS OF MATERIAL INVENTORY

PLANNING FROM AT 8855 20" BICYCLE
USING MATERIAL REQUIREMENT PLANNING
METHOD WITH LOT SIZING TECHNIQUE
APPROACHES

Rizky Laila Febriana

0615040048

D4 Design and Manufacture Engineering

Shipbuilding Institute of Polytechnic Surabaya
2019
 Background

1 Inventory is important for the company

2 Inventory management system in PT. X

Materials inventory planning of AT 8855 20“ bicycle using Material Requirement

3 Planning method

4 Lot Sizing techniques to calculate the order quantity

Research
Problems
 How much the How to determine the How to plan AT 8855 20"
forecasting demand for most appropriate bicycle material
AT 8855 20" bicycle in forecasting method inventory in 2019 using
2019 using the between Exponential the Material Requirement
Exponential Smoothing Smoothing and Moving Planning method with the
and Moving Average Average to forecast the order quantity calculation
method ? demand for AT 8855 20" approach using the Lot
bicycle ? Sizing technique to
obtain a minimum total
inventory cost?
Research
Objective
Forecast the number of Determine the Planning the AT 8855 20"
AT 8855 20" bicycle forecasting method that bicycle materials
demands for the period has the smallest error in inventory for the period
of 2019 using the forecasting demand for of 2019 using the Material
Exponential Smoothing AT 8855 20" bicycle for Requirement Planning
and Moving Average the period of 2019. method with the Sizing
methods. Lot technique approach
to obtain a minimum total
inventory cost.
Scope of Problems Not consider the
amount of
materials sold
The Lot Sizing directly. The lead time of
techniques used are
each materials are
Lot for Lot, Period
known.
Order Quantity, Part
Period Balancing,
It is assumed that
Least Unit Cost, and
the actual data of
The forecasting Least Total Cost.
demand and
method used are forecasting are sales
Exponential data and bicycle
Smoothing and All of the materials production data.
Moving Average. of AT 8855 20"
The materials
bicycle are brought
planned for
from suppliers.
inventory are
materials for AT 8855 The procurement cost
20" bicycle. of materials is fixed,
and there is no increase
or decrease of
materials prices during
There is no price the research period
discount in certain
quantity purchases.
Flow Chart A

Start
Data Processing

1. Create a structure product of AT 8855 20" bicycle.

Identification of Problems
Research Problem
Setting Purpose and Scope of Research
2. Forecasting the number of demand using the Exponential Smoothing and
Moving Average method
3. Selection of the forecasting method with the lowest error
4. Planning material inventories using the Material Requirement Planning method
with order quantity calculations using Lot for Lot, Period Order Quantity, Part
Period Balancing, Least Unit Cost, and Least Total Cost techniques.
5. Arrange the material ordering schedule of the five lot sizing techniques based
on the lead time of each material and calculate total inventory cost.

Study of Field Study of Literature

Analysis of Result

Determine lot sizing techniques that produce the minimum total inventory
Data Collected costs as a technique used in material inventory planning

A Taking Conclusions and Suggestions

Finish
Product
Structure of
AT 8855 20" Bicycle

AT 8855 20" bicycle

Rim (2) Spoke Tire Reflector Hub Frame (1) Handlebars (1) Brake Stem
(72) (1) (1) (1) (1) (1)

Reflector Rotor Crank Head part Saddle Fork Chain Chain Pedal
Side Stan
(1) (1) (1) (1) (1) (1) (1) Adjuster (2)
dard(1)
(2)
Production data of
AT 8855 20" Bicycle

Production
Month
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
January 80 100 120 150 280 210 300 450 500 500 430
February 100 120 130 120 300 250 310 460 450 550 450
March 80 100 150 130 250 240 350 480 400 530
April 120 80 130 160 230 300 400 520 420 580
May 130 60 140 200 180 300 420 550 460 500
June 60 100 160 220 200 230 450 550 520 620
July 100 130 180 230 220 340 480 560 480 650
August 110 150 200 200 250 360 410 500 500 600
September 130 120 220 180 260 300 350 440 550 550
October 100 100 250 170 200 360 360 410 530 500
November 80 60 180 180 180 330 320 400 450 540
December 50 40 150 200 150 300 310 400 430 600
Sales data of
AT 8855 20" Bicycle

Sales
Month
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
January 73 85 115 132 275 211 307 441 503 485 432
February 108 116 134 125 314 238 314 463 431 563 447
March 76 110 151 137 246 254 368 476 396 531
April 117 68 129 165 221 296 382 518 430 552
May 125 65 145 182 195 300 434 535 437 526
June 64 90 156 224 186 225 437 554 524 615
July 98 126 180 229 224 337 435 542 472 672
August 112 148 194 195 243 354 438 511 495 540
September 123 134 221 197 262 315 362 429 536 536
October 95 97 247 163 190 358 341 432 542 494
November 78 75 172 178 194 331 332 421 463 527
December 46 42 165 193 152 304 310 394 454 548
 Moving Average
In forecasting using the moving average method, the value of n 2 monthly, 3 monthly,
4 monthly, 5 monthly, 6 monthly, 7 monthly, 8 monthly, 9 monthly, and 10 monthly are
used. In this method the formula used is as follows:

Month Year n=2 n=3 n=4 n=5 n=6 n=7 n=8 n=9 n = 10
January - - - - - - - - -
February - - - - - - - - -
March 90.50 - - - - - - - -
April 92.00 85.67 - - - - - - -
May 96.50 100.33 93.50 - - - - - -
June 121.00 106.00 106.50 99.80 - - - - -
July 94.50 102.00 95.50 98.00 93.83 - - - -
2009
August 81.00 95.67 101.00 96.00 98.00 94.43 - - -
100.0
September 105.00 91.33 99.75 103.20 98.67 96.63 - -
0
102.1
October 117.50 111.00 99.25 104.40 106.50 102.88 99.56 -
4
104.8 102.0
November 109.00 110.00 107.00 98.40 102.83 101.25 99.10
6 0
December 86.50 98.67 102.00 101.20 95.00 99.29 101.50 98.67 99.60
Exponential Smoothing

In forecasting using the exponential smoothing method used the value α = 0.1, α = 0.2, α = 0.3, α
= 0.4, α = 0.5, α = 0.6, α = 0.7, α = 0.8, α = 0.9. In this method the formula used is as follows:

Month Year α = 0.1 α = 0.2 α = 0.3 α = 0.4 α = 0.5 α = 0.6 α = 0.7 α = 0.8 α = 0.9

January - - - - - - - - -
February 79.30 78.60 77.90 77.20 76.50 75.80 75.10 74.40 73.70
March 100.80 101.60 102.40 103.20 104.00 104.80 105.60 106.40 107.20
April 79.60 79.20 78.80 78.40 78.00 77.60 77.20 76.80 76.40
May 119.70 119.40 119.10 118.80 118.50 118.20 117.90 117.60 117.30
June 129.50 129.00 128.50 128.00 127.50 127.00 126.50 126.00 125.50
2009
July 60.40 60.80 61.20 61.60 62.00 62.40 62.80 63.20 63.60
August 99.80 99.60 99.40 99.20 99.00 98.80 98.60 98.40 98.20
September 110.20 110.40 110.60 110.80 111.00 111.20 111.40 111.60 111.80
October 129.30 128.60 127.90 127.20 126.50 125.80 125.10 124.40 123.70
November 99.50 99.00 98.50 98.00 97.50 97.00 96.50 96.00 95.50
December 79.80 79.60 79.40 79.20 79.00 78.80 78.60 78.40 78.20
Forecasting
Error
Forecasting Error

Calculation of forecasting
errors used a measure of
accuracy in MAD, MSE
and MAPE. Data used
and compared are data
from 2009 to February
2019, because only those
data have actual values
and production values.
Forecasting Error
Moving Average
α
n=2 n=3 n= 4 n=5 n=6 n=7 n=8 n=9 n = 10
Error
MAD 38.56 41.96 43.9 44.14 44.1 44.12 43.92 43.66 43.83

MSE 2182.87 2492.43 2752.46 2845.56 2969.95 3087.6 3137.32 3171.05 3220.55

MAPE 17.92 19.09 19.42 18.88 18.01 17.73 17.58 17.38 17.26

Exponential Smoothing
α
α = 0.1 α = 0.2 α = 0.3 α = 0.4 α = 0.5 α = 0.6 α = 0.7 α = 0.8 α = 0.9
Error

MAD 33.27 33.18 33.1 33.02 32.98 32.98 33.02 33.1 33.14

MSE 1903.83 1889.42 1876.83 1876 1861.3 1859.3 1861 1866.3 1875.3

MAPE 15.19 15.21 15.22 15.24 15.28 15.32 15.38 15.44 15.51
The Results of Bicycle
Forecasting Forecasting for
Error Analysis the 2019

Month Forecast Integration

Can be seen in the previous January 594.8 595
table that the forecasting method February 430.2 430

that has the least forecasting March 449.7 450

April 530.6 531
error is the Exponential
May 563.25 563
Smoothing method with α = 0.6. June 515.6 516
So that forecasting demand for July 617 617

the 2019 period used the August 663.2 663

September 564 564
Exponential Smoothing method
October 541.6 542
with α = 0.6 November 496.4 496
December 532.2 532
Forecasting
Bicycle Material
Month
Material
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Frame 595 430 450 531 563 516 617 663 564 542 496 532
Fork 595 430 450 531 563 516 617 663 564 542 496 532
Headpart 595 430 450 531 563 516 617 663 564 542 496 532
Rotor 595 430 450 531 563 516 617 663 564 542 496 532
Hub 1190 860 900 1062 1126 1032 1234 1326 1128 1084 992 1064
Rim 1190 860 900 1062 1126 1032 1234 1326 1128 1084 992 1064
Tire 1190 860 900 1062 1126 1032 1234 1326 1128 1084 992 1064
Spoke 42840 30960 32400 38232 40536 37152 44424 47736 40608 39024 35712 38304
Crank 595 430 450 531 563 516 617 663 564 542 496 532
Forecasting
Bicycle Material
Month
Material
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Pedal 1190 860 900 1062 1126 1032 1234 1326 1128 1084 992 1064
Chain 595 430 450 531 563 516 617 663 564 542 496 532
Chain
1190 860 900 1062 1126 1032 1234 1326 1128 1084 992 1064
Adjuster
Side
595 430 450 531 563 516 617 663 564 542 496 532
Standard
Saddle 595 430 450 531 563 516 617 663 564 542 496 532
Brake 595 430 450 531 563 516 617 663 564 542 496 532
Reflector for
595 430 450 531 563 516 617 663 564 542 496 532
frame
Reflector for
595 430 450 531 563 516 617 663 564 542 496 532
wheel
Brake 595 430 450 531 563 516 617 663 564 542 496 532
Stem 595 430 450 531 563 516 617 663 564 542 496 532
Material Requirement
Planning with Lot Sizing
Techniques
 Period
Bicycle / L=1 November December January February March
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross requirement 595 430 450
On hand inventory 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Requirement 595 430 450
Planned order rec
595 430 450
eipts
Planned order rele
595 430 450
ases

Period
Bicycle / L=1 April May June July August
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross requirement 531 563 516 617 663
On hand inventory 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Requirement 531 563 516 617 663
Planned order rece
531 563 516 617 663
ipts
Planned order rele
531 563 516 617 663
ases
 Period
Bicycle / L=1 September October November December
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Gross requirement 564 542 496 532
On hand inventory 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Requirement 564 542 496 532
Planned order receipt
564 542 496 532
s
Planned order release
564 542 496
s
Lot For Lot (LFL)

Periode
November December January February March
Spoke / L=8
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Gross requirement 42840 30960 32400

On hand inventory 312 312 312 312 312 312 312 312 312 0 0 0 0 0 0 0 0 0 0 0

Net Requirement 42528 30960 32400

Planned order receip

42528 30960 32400
ts
Planned order releas
42528 30960 32400 38232 40536
es
Lot For Lot (LFL)
Period
Spoke / L=8 April May June July August
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Gross requirement 38232 40536 37152 44424 47736

On hand inventory 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Requirement 38232 40536 37152 44424 47736
Planned order recei
38232 40536 37152 44424 47736
pts
Planned order relea
37152 44424 47736 40608 39024
ses
Period
Spoke / L=8 September October November December
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Gross requirement 40608 39024 35712 38304

On hand inventory 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net Requirement 40608 39024 35712 38304
Planned order recei
40608 39024 35712 38304
pts
Planned order relea
35712 38304
ses
 Period Order Quantity (POQ)

Periode
November December January February March
Spoke / L=8
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Gross requirement 42840 30960 32400

On hand inventory 312 312 312 312 312 312 312 312 312 0 0 0 0 0 0 0 0 0 0 0

Net Requirement 42528 30960 32400

Planned order receipts 42528 30960 32400

Planned order releases 42528 30960 32400 38160 41544

 Period Order Quantity (POQ)
Period
Spoke / L=8 April May June July August
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Gross requireme
38232 40536 37152 44424 47736
nt
On hand inventor
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
y
Net Requirement 38160 41544 36216 44568 46944
Planned order re
38160 41544 36216 44568 46944
ceipts
Planned order rel
36216 44568 46944 42768 39528
eases
Period
Spoke / L=8 September October November December
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56
Gross requireme
40608 39024 35712 38304
nt
On hand inventor
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
y
Net Requirement 42768 39528 35928 38808
Planned order re
42768 39528 35928 38808
ceipts
Planned order rel
35928 38808
eases
 Part Period Balancing (PPB)

Period
Spoke / L=
November December January February March
8
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross req 4284
30960 32400
uirement 0
On hand i 31 31 31 31 31 31 1421
312 312 312 142128 142128 142128 111168 111168 111168 111168 78768 78768 78768
nventory 2 2 2 2 2 2 28
Net Requir 4252
30960 32400
ement 8
Planned o
1846
rder recei
56
pts
Planned o
1846
rder releas
56
es
 Part Period Balancing (PPB)
Period
April May June July August
Spoke / L=8
2 2
21 22 23 24 25 26 29 30 31 32 33 34 35 36 37 38 39 40
7 8
Gross requir 4053 4442
38232 37152 47736
ement 6 4
On hand inve 4053 4053 4053 13276 13276 8834 8834 8834 4060 4060
78768 40536 0 0 0 0 132768 132768 88344 40608
ntory 6 6 6 8 8 4 4 4 8 8
Net Require 4053 4442
38232 37152 47736
ment 6 4
Planned orde
169920
r receipts
Planned orde 16992 11304
r releases 0 0
 Part Period Balancing (PPB)

Period
September October November December
Spoke / L=8
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Gross requirement 40608 39024 35712 38304

On hand inventory 40608 0 0 0 0 74016 74016 74016 74016 38304 38304 38304 38304 0 0 0

Net Requirement 40608 39024 35712 38304

Planned order recei

113040
pts
Planned order relea
ses
 Least Unit Cost (LUC)

Period
Spoke / L=8 November December January February March
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross requir 4284
30960 32400
ement 0
On hand inve 31 31 31 31 31 31 3020 30204 27108
312 312 312 302048 302048 271088 271088 271088 238688 238688 238688
ntory 2 2 2 2 2 2 48 8 8
Net Require 4252
30960 32400
ment 8
Planned orde 3445
r receipts 76
Planned orde 3445
r releases 76
 Least Unit Cost (LUC)

Period
Spoke /
April May June July August
L=8
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross r
3823 4053 3715
equire 44424 37736
2 6 2
ment
On han
2386 2004 2004 2004 2004 1599 1599 1599 1599 1227 1227 12276 1227
d inven 78344 78344 78344 78344 40608 40608 40608
88 56 56 56 56 20 20 20 20 68 68 8 68
tory
Net Re
3823 4053 3715
quirem 44424 37736
2 6 2
ent
Planne
d order
receipt
s
Planne
d order 11304
release 0
s
Least Unit Cost (LUC)

Period

Spoke / L=8 September October November December

5 5
41 42 43 44 45 46 47 48 49 50 51 52 53 54
5 6
3902 3571 3830
Gross requirement 40608
4 2 4
7401 7401 7401 7401 3830 3830 3830 3830
On hand inventory 40608 0 0 0 0 0 0 0
6 6 6 6 4 4 4 4
3902 3571 3830
Net Requirement 40608
4 2 4
Planned order recei 1130
pts 40
Planned order relea
ses
Least Total Cost (LTC)

Period
Spoke / L=
8 November December January February March
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Gross requ 4284
30960 32400
irement 0
On hand in 31 31 31 31 31 31 3120 3120 31204
312 312 312 312048 281088 281088 281088 281088 248688 248688 248688
ventory 2 2 2 2 2 2 48 48 8
Net Requir 4252
30960 32400
ement 8
Planned or
3545
der receipt
76
s
Planned or
3545
der release
76
s
Least Total Cost (LTC)

Period
Spoke /
April May June July August
L=8
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Gross r
3823 4053 3715 444
equire 47736
2 6 2 24
ment
On han
2486 2104 2104 2104 2104 1699 1699 1699 1699 1327 1327 1327 1327 883
d inven 88344 88344 88344 40608 40608 40608
88 56 56 56 56 20 20 20 20 68 68 68 68 44
tory
Net Re
3823 4053 3715 444
quirem 47736
2 6 2 24
ent
Planne
d order
receipt
s
Planne
d order
113040
release
s
Least Total Cost (LTC)

Period
Spoke / L=8 September October November December
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56
Gross requirement 40608 39024 35712 38304
On hand inventory 40608 0 0 0 0 74016 74016 74016 74016 38304 38304 38304 38304 0 0 0
Net Requirement 40608 39024 35712 38304

Planned order receipts 113040

Planned order releases

Thank you