<![CDATA[Ineffective raw material inventory management often leads to high operational expenditures caused by excessive ordering frequency or accumulated holding costs from overstocking. This research seeks to examine the optimization of order quantity, ordering frequency, ordering cost, holding cost, and total inventory cost of raw materials. The methodology employed is a descriptive literature review accompanied by numerical simulation using secondary data to demonstrate the operational mechanism of the Economic Order Quantity model. The results show that the most economical order level is obtained when total ordering costs and total holding costs are in equilibrium. The simulation reveals that determining order quantity based on economic calculations leads to the lowest possible total inventory cost, whereas ordering quantities smaller or larger than the economic point increases total expenditures. The implications of this study provide a measurable basis for practitioners to formulate efficient procurement policies while considering operational constraints in real-world scenarios.]]>
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