Inventory Cost Reduction and EOQ for Personal Protective Equipment: A Case Study in Oil and Gas Company

Andian Ari Istiningrum (Program Studi Logistik Minyak dan Gas, Politeknik Energi dan Mineral)
Sono Sono (Program Studi Logistik Minyak dan Gas, Politeknik Energi dan Mineral)
Virgy Andika Putri (Program Studi Logistik Minyak dan Gas, Politeknik Energi dan Mineral)

Jurnal Logistik Indonesia
Vol 5, No 2: Oktober 2021

Personal Protective Equipment (PPE) is one of materials that is urgent for oil and gas companies. Company X is an upstream oil and gas company located in Indonesia that requires its employees to wear PPE. Therefore, the PPE inventory must be controlled carefully to maintain the level of PPE inventory. This research has an objective to reduce PPE inventory cost through the application of Economic Order Quantity (EOQ) method. To achieve this objectives, a research was conducted to 22 items of PPE in Company X. The research was conducted by forecasting PPE demand, calculating optimal quantity and ordering frequency, calculating safety stock and reorder point, and finally calculating the inventory cost reduction. The result shows that the implementation of EOQ has enabled the company to reduce its inventory cost by 19.72%. Therefore, it is advisable for Company X to design and implement EOQ as the inventory control program for PPE.