Optimization of Raw Material Order Quantity for Single Items Multiple Suppliers Using Linear Programming Methods: A Case Study at PT. TELPP
Abstract
PT. Tanjungenim Lestari Pulp and Paper (TLPP) is a world-class pulp manufacturer with high-quality products and environmentally friendly pulp mills. The company uses Eucalyptus Pellita trees as raw material, which will be processed into paper pulp. The problem currently faced by the company is a shortage of raw materials (under stock), which means that when the company experiences a shortage of raw materials, it will not be able to meet its monthly and daily production targets. This study aims to determine the optimal order quantity from two suppliers while minimizing total costs at TLPP using the Linear Programming approach. The results of the study indicate the optimal order quantities for both suppliers. Thus, this method can be applied by the company to avoid lost sales that could be detrimental to the company.
Keywords: Linear Programming, Inventory, Shortages and Surpluses of Raw Materials, Economic Order Quantity
References
Hillier, F., & Liebermen, G. (2000). Introduction To Operations Research (seven edit). Mc Graw Hill.
Chang, C. Ter, Chin, C. L., & Lin, M. F. (2006). On the single item multi-supplier system with variable lead-time, price-quantity discount, and resource constraints. Applied Mathematics and Computation, 182(1), 89–97.
R. Raja, N.K. Kaliramana, S. Chandrab and H. Chaudhryc (2015), Integrated production inventory model: multi-item, multiple suppliers and retailers, exponential demand rate, Uncertain Supply Chain Management 3 (2015) 213–224
Taha, H. A. (2007). Operations Research 8th.pdf (p. 813).
Heizer, J., Render, B., & Munson, C. (2017). Operations Management.
