Cost Optimization of Inventory Control Using Dynamic Programming
Optimalisasi Biaya Pengendalian Persediaan Menggunakan Program Dinamis
DOI:
https://doi.org/10.21070/ups.10429Keywords:
Inventory Control, Linear Regression, Dynamic Programming, Cost Optimization, Round BarAbstract
Poor inventory control of raw materials can increase total costs due to discrepancies between purchasing quantities and actual demand. A company using round bar AISI 4135 as raw material faces challenges in determining appropriate purchasing quantities for each period. This study aims to forecast raw material requirements based on historical data and to determine an optimal purchasing policy in order to minimize total inventory costs. Linear regression is employed to project raw material demand, and the results are further processed using Dynamic Programming with a backward recursive approach to determine the optimal purchasing quantity for each period. The findings indicate that the total annual raw material requirement is 169.926 kg and that the implementation of Dynamic Programming results in a minimum total inventory cost of Rp 7,877,017,110 with a cost saving of 10.40%.
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