A Comparison of Continuous and Periodic Review on Inventory Components of Dump Trucks

Proper inventory planning can facilitate smooth the production process. It will minimize the problem of out of stock and over stock. The case company has a problem in controlling the availability of components, namely the occurrence of shortages of stock that caused the production process disrupted. The ABC analysis method is used to see the classification of components often out of stock. Inventory planning methods with continuous review and periodic review method were compared to determine optimal ordering lots, and reorder points. It also examined inventory policies, namely service level, safety stock, ordering costs, holding costs, and cost due to possible shortages. The results showed that for this particular problem continuous review is better than periodic review. It offered saving of the total inventory costs 16% of the actual inventory cost. Whereas, for the periodic review method saved of 6% of the actual cost of inventory.