Determine The Optimal Amount of Crude Palm Oil (CPO) Production by Using The Economic Production Quantity Method (Case Study: PT. Perkebunan Nusantara II Sawit Seberang)

PT. Perkebunan Nusantara II Sawit Seberang is a state-owned company that produces Crude Palm Oil (CPO). In production activities, companies often experience that problem of excess inventory, this problem can result in losses for the company, namely the increase in storage costs. Inventory is a stock of goods needed by the company in dealing with unstable demand. The purpose of this research is to optimize the amount of production to minimize to the total cost of inventory. This study uses the Economic Production Quantity (EPQ) method, the EPQ method is a method that determines the optimal production quantity and optimal time intervals so as to minimize the total cost of inventory. By using the EPQ method, the optimal production amount for each production cycle is 5.113.811 kg with a production time intervals of 1,916 months so that the total cost of procuring CPO supplies for each period is Rp9.287.852.512