<![CDATA[PT. Jati Luhur Agung is a company engaged in the wood industry, focusing on the wood flooring and wood component business. In the manufacturing industry, raw materials play a crucial role in ensuring the continuity of production. The company has been facing an overstock problem in raw materials because purchases are made solely based on estimation or forecasting, resulting in higher costs.The purpose of this study is to determine the optimal raw material order quantity to avoid overstocking and to minimize total costs. This research compares the Economic Order Quantity (EOQ) method and the Just In Time (JIT) method to identify which is more optimal and cost-efficient.The findings of this study indicate that the EOQ method is more effective compared to JIT. By applying EOQ, the optimal economic order quantity is 124 m³, with an ordering frequency of twice per year. The total inventory cost under EOQ is IDR 54.259/418, whereas the company’s previous policy incurred a cost of IDR 268.274.868 (TIC) between the company’s policy and EOQ amounts to IDR 214.015.450, leading to substantial cost savings.In conclusion, the EOQ method has proven to effectively prevent excessive raw material inventory by enabling optimal ordering and achieving significant cost reductions.]]>
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