Inventory Control of Vegetable Oil Products Using Continuous Review System (Q) Approach and Periodic Review System (P) Methods in Retail Companies: A Case Study of Indonesia

Abstract

Retail companies are businesses that have a significant role in providing quality staples to improve public health. Every retail company wants the production inventory control system to run well to meet consumer demand. Suppose the amount of inventory in a retail company is too small. In that case, it will disrupt consumer demand for products that consumers want to buy and lose the opportunity to earn profits if an order is more significant than forecast. Meanwhile, if product inventory exceeds the need for a product, it will cause high costs, and if stock is stored for too long, it will result in damage and expiration. This retail company sells quality products and provides a wide range of excellent and complete products and makes it easier for customers to find their needs as one of the best. A company that needs to have a product control system to maintain sales and sell quality products and finally compete with other national and foreign retail companies. However, the current product inventory processing is not optimal because it is only based on previous inventory data. It can be seen from the varying amount of inventory and the high frequency of ordering. This study aims to obtain the most optimal comparison results by using the minimum total cost criteria and minimizing the cost of purchasing the product. This study compares two methods, namely the Continuous Review System (Q) method and the Periodic Review System (P) method. The most suitable method was the Q method with the total inventory cost of Vegetable Oil Products of Rp in this study. 13,371,600 with an efficiency of 42% of the entire inventory costs incurred by retail companies.