Strategic Inventory Control Using Economic Order Quantity and ABC Classification to Enhance Operational Excellence

This study addresses the inventory management challenges in a construction project company that uses hydraulic systems. The company faces inefficiencies in spare parts management, often resulting in either surplus or deficiency of inventory due to a lack of systematic inventory classification. The absence of structured inventory processes has led to extended project timelines and increased costs due to stock shortages and quality degradation from prolonged storage of surplus parts. To resolve these issues, this research applies the Economic Order Quantity (EOQ) method, aiming to optimize order quantities and reorder points. The study classifies inventory components using ABC analysis to focus efforts on high-value items, calculating EOQ, safety stock, and reorder points for class “A” components. Results reveal that this approach not only reduces inventory costs but also minimizes project delays associated with inventory shortages. The study provides a cost-effective inventory management strategy that can significantly improve project execution by ensuring the timely availability of essential inventories.