ANALYSIS OF THE APPLICATION OF FIFO AND EOQ METHODS IN RAW MATERIAL INVENTORY CONTROL AT PT. XYZ

Abstract

This study aims to analyze the application of the FIFO (First In First Out) and EOQ (Economic Order Quantity) methods in controlling the inventory of fresh milk raw materials at PT. XYZ. The research method used was a mixed-methods approach. The results show that the application of the FIFO method has been successful and effective in preventing raw material spoilage because inventory is used in the order in which it was received. Meanwhile, the EOQ calculation results indicate an optimal order quantity of 492,610 units with an order frequency of 3 times over 10 months, as well as total inventory costs of Rp 1,008,737,900. Compared with the company's existing method, EOQ has proven to be more efficient in reducing inventory costs. Thus, the combination of FIFO and EOQ can improve the effectiveness of inventory control and cost efficiency at the company.