Implementation of the ABC Analysis to the Inventory Management
Keywords:
ABC analysis, exploratory data analysis, inventory management, pareto and product segmentation.
Abstract
In an ever-changing market, inventory management is becoming a major problem that requires thorough planning, supervision, and control. If companies are well managed and have good planning and control, they can last a long time. Poor inventory management is very detrimental to the business as it can cause the company to fail to meet customer or consumer demands, which can lead customers to choose other companies that can meet their demands. Plan your stockpiles to maintain balance, avoid excess or deficiency, and control storage costs. ABC analysis, one of the most common inventory management techniques, divides inventory into three categories (A, B, and C) based on total annual product usage or total inventory cost based on the Pareto principle. The goal of this study is to use ABC analysis in the company's inventory management to identify products in categories A, B, and C based on profitability and sales factors. The research phases include data collection, data preprocessing, exploratory data analysis, ABC analysis, key product analysis, and explanatory analysis. According to the research findings, Segment A accounts for 18% of the total product and generates 78% of the overall profit. Segment B contributes 23% of the total number of items and 16% of all revenue.
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References
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[3] D. Kartinah and T. Kuncara, “Analysis Of The Application Of Recording Methods And Assessment Of Inventories In Accordance With Psak No. 14 At Andrew Smith Urban Lifestyle Supermall Karawaci,” Int. J. Sci. Technol. Manag., vol. 2, no. 4, pp. 1399–1409, 2021, doi: 10.46729/ijstm.v2i4.285.
[4] Y. D. R. Montororing and M. Widyantoro, “Model of Inventory Planning Using Monte Carlo Simulation in Retail Supermarket With Consider To Competitors and Stimulus Strategies,” J. Appl. Eng. Technol. Sci., vol. 4, no. 1, pp. 342–350, 2022, doi: 10.37385/jaets.v4i1.1093.
[5] I. M. D. P. Asana, M. L. Radhitya, K. K. Widiartha, P. P. Santika, and I. K. A. G. Wiguna, “Inventory control using ABC and min-max analysis on retail management information system,” in International Conference on Innovation In Research, 2020. doi: 10.1088/1742-6596/1469/1/012097.
[6] R. N. Aini and E. Aryanny, “Policy Making in Optimizing Inventory Control with Continous and Periodic Review Method at PT. XYZ,” Prozima (Productivity, Optim. Manuf. Syst. Eng., vol. 5, no. 2, pp. 31–38, 2022, doi: 10.21070/prozima.v5i2.1452.
[7] D. A. Prihasti and A. A. Nugraha, “Analisis Manajemen Persediaan Dengan Metode Economic Order Quantity (EOQ) Pada Persediaan Bahan Baku UKM Bydevina,” Indones. Account. Lit. J., vol. 1, no. 3, pp. 537–548, 2021, doi: 10.35313/ialj.v1i3.3230.
[8] O. Abdolazimi, M. S. Esfandarani, and A. Abraham, “Design of a Closed Supply Chain Under Uncertainty with Regards to Social and Environmental Impacts,” in Proceedings of the 12th International Conference on Soft Computing and Pattern Recognition (SoCPaR 2020), A. Abraham, Y. Ohsawa, N. Gandhi, M. A. Jabbar, A. Haqiq, S. McLoone, and B. Issac, Eds., Cham: Springer International Publishing, 2021, pp. 476–488.
[9] Julia, “Perancangan Dan Penyusunan Sistem Pengelolaan Persediaan Pada Vihara Buddhayana Batam,” ConCEPt, vol. 1, no. 1, pp. 944–950, 2021, [Online]. Available: http://dx.doi.org/10.30863/attadib.v1i1.717%0Ahttps://jurnal.iain-bone.ac.id/index.php/attadib/article/viewFile/717/558%0Ahttp://dx.doi.org/10.1111/j.1748-0922.2011.01545_1.x%0Ahttps://api.wiley.com/onlinelibrary/tdm/v1/articles/10.1111%2Fj.1748-0922.2011
[10] A. Ayuningputri, N. I. Saragih, and P. S. Muttaqin, “Minimization of PT XYZ Interior Fabric Inventory Costs With Continuous Review (s, S) And Periodic Review (R, s, S) Based on ABC Analysis,” Motiv. J. Mech. Electr. Ind. Eng., vol. 4, no. 3, pp. 329–340, 2022, doi: 10.46574/motivection.v4i3.168.
[11] Y. D. Regent Montororing and F. Nurprihatin, “Model of quality control station allocation with consider work in process, and defect probability of final product,” J. Phys. Conf. Ser., vol. 1811, 2021, doi: 10.1088/1742-6596/1811/1/012013.
[12] S. Jayakumaran, W. Z. Shan, and D. Daud, “ABC Analysis: A Qualitative Case Study on Inventory Management in Giant Superstore Taman Connaught, An Outlet of GCH Retail (Malaysia) SDN. BHD.,” IOP Conf. Ser. Mater. Sci. Eng., vol. 780, no. 7, pp. 0–8, 2020, doi: 10.1088/1757-899X/780/7/072016.
[13] A. R. Fahriati, D. S. Suryatiningrum, and T. J. Saragih, “Inventory Control of Drugs Listed in Private Health Insurance at Pharmacies in South Tangerang using ABC Analysis,” Pharmacol. Clin. Pharm. Res., vol. 6, no. 1, p. 18, 2021, doi: 10.15416/pcpr.v6i1.31541.
[14] W. Muchaendepi, C. Mbohwa, T. Hamandishe, and J. Kanyepe, “Inventory Management and Performance of SMEs in the Manufacturing Sector of Harare,” Procedia Manuf., vol. 33, pp. 454–461, 2019, doi: https://doi.org/10.1016/j.promfg.2019.04.056.
[15] L. Rahmawati, M. M. SP, F. M. Sari, and G. Djuanda, Analisis Pengendalian Persediaan Toko Kelontong, I. CV Tahta Media Group, 2023. [Online]. Available: http://tahtamedia.co.id/index.php/issj/article/view/501%0Ahttps://tahtamedia.co.id/index.php/issj/article/download/501/496
[16] Y. Baali et al., Manajemen Kualitas, I. Padang: CV. Getpress Indonesia, 2023. [Online]. Available: www.getpress.co.id
[17] R. P. Juarsa, A. Simalongo, S. A. Firdaus, and G. E. Siburian, “Determining Inventory Control Priorities in the Breakfast Food Industry in Pekanbaru City using ABC Classification,” SAGU Journal; Agicultural Sci. Technol., vol. 22, no. 2, pp. 38–42, 2023, doi: dx.doi.org/10.31258/sagu.22.2.p.%25p.
[18] M. Mehdizadeh, “Integrating ABC analysis and rough set theory to control the inventories of distributor in the supply chain of auto spare parts,” Comput. Ind. Eng., vol. 139, p. 105673, 2020, doi: https://doi.org/10.1016/j.cie.2019.01.047.
[19] E. Chinello, Z. N. Lee Herbert-Hansen, and W. Khalid, “Assessment of the impact of inventory optimization drivers in a multi-echelon supply chain: Case of a toy manufacturer,” Comput. Ind. Eng., vol. 141, p. 106232, 2020, doi: https://doi.org/10.1016/j.cie.2019.106232.
[20] Y. M. Omar, M. Minoufekr, and P. Plapper, “Business analytics in manufacturing: Current trends, challenges and pathway to market leadership,” Oper. Res. Perspect., vol. 6, p. 100127, 2019, doi: https://doi.org/10.1016/j.orp.2019.100127.
[21] M. A. Ali, J. A. Gul, S. M. Hasan, and S. Shah, “Inventory Management System for a General Items Warehouse of the Textile Industry,” Int. J. Appl. Sci. Dev., vol. 2, pp. 101–110, 2023, doi: 10.37394/232029.2023.2.11.
[22] A. C. Janine, “Bridging the performance gap at a fast-moving consumer goods company,” Eindhoven University of Technology, 2024.
[23] E. T. Bradlow, M. Gangwar, P. Kopalle, and S. Voleti, “The Role of Big Data and Predictive Analytics in Retailing,” J. Retail., vol. 93, no. 1, pp. 79–95, 2017, doi: https://doi.org/10.1016/j.jretai.2016.12.004.
[24] M. Kmiecik, “Logistics Coordination Based on Inventory Management and Transportation Planning by Third-Party Logistics (3PL),” Sustainability, vol. 14, no. 13. 2022. doi: 10.3390/su14138134.
[25] A. Raza, “Sales Data Analysis,” kaggle. Accessed: Jun. 20, 2024. [Online]. Available: https://www.kaggle.com/datasets/aemyjutt/salesdata.
Published
2024-07-29
How to Cite
Ray Silaen, B., Nasution, M., & Muti’ah, R. (2024). Implementation of the ABC Analysis to the Inventory Management. International Journal of Science, Technology & Management, 5(4), 816-825. https://doi.org/10.46729/ijstm.v5i4.1144
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Articles
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