Inventory Planning of Raw Materials for Furniture Products (Case Study: CV XYZ Furniture)

The burgeoning industrial sector in Indonesia has intensified competition among businesses vying for market share. The furniture industry is a prime example of this dynamic landscape. To expand their market reach, companies must demonstrate their ability to fulfill every consumer demand. Failure to meet these expectations will prompt consumers to seek alternatives. One crucial factor in meeting consumer demands is product availability, which is directly influenced by the availability of raw materials within the company. CV XYZ Furniture, a furniture company based in Padang City, exemplifies this challenge. The company produces a diverse range of furniture, primarily utilizing rattan as its raw material. However, CV XYZ Furniture currently lacks a structured inventory planning method for raw materials, resulting in excess inventory for each period. To address this issue, this research aims to establish an optimized inventory planning strategy for raw materials used in furniture production at CV XYZ Furniture. The continuous review system method serves as the foundation for this endeavor. The research outcomes encompass the determination of optimal demand quantity, reorder point, and safety stock. The implementation of the continuous review system model yielded a significant reduction in total inventory costs, amounting to Rp8,625,594 or 2.03%. It can be proven that the continuous review system model is suitable for calculating raw material inventory at CV XYZ Furniture for raw material planning in the following years.