TITLE

The Determination of Optimal Inventory using Markov Chain

TYPE

Seminars

Abstract

PT NM is a company engaged in spare parts, especially branded cars in West Jakarta. The level of inventories of goods owned by these companies is high because the company did not want to experience stock out of stock but on one side the stock is large enough so the costs incurred by companies such as storage costs of goods becomes even greater. In order to control inventory levels, this study uses a Markov Chain method that can identify optimal inventory level and the expectation of profit earned per month by making estimates of the future demand a previous demand. The research results shows expectation of profit of each state starting from state 2 to state 10 is IDR. 13,146.98921; IDR 12,246.94064; IDR 11,346.61466; IDR 10,444.64569; IDR 9,534.074035; IDR 8,584.408534; IDR 7,484.413248; IDR 5,913.288143; IDR 3,211.609986,-. While the profit expectations that earned by the company per month is IDR 694,233.333, and the optimal inventory level is 50.

Citation

Sarjono H, Aryanto R and Novie. (2013). The Determination of Optimal Inventory using Markov Chain. 2013 International Conference on Information Engineering, ICIE 2013, 49, 1147-1157. Hong Kong; China: WITPress

Keywords

Inventory levels; Markov chain; Profit expectation

Published On

2013 International Conference on Information Engineering, ICIE 2013

Author

Haryadi Sarjono

Lektor Kepala

  • Rudy Aryanto
  • Novie

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