Improving the Efficiency of Raw Material Inventory Management in the Cosmetic Industry Using EOQ and ROP Concepts: A Case Study of an OEM Manufacturing Company
Article Sidebar
Main Article Content
Abstract
This research aims to present the application of the Economic Order Quantity (EOQ) and Reorder Point (ROP) concepts to improve the raw material inventory management of a cosmetic Original Equipment Manufacturer (OEM) company, using a case study from a sample firm. Initial findings revealed that the company faced challenges with the shortage of key production raw materials, which impacted operational efficiency. An analysis of raw material withdrawal data from July to September 2024 showed a stock-out rate as high as 26.85% of the total 242 withdrawal transactions. To address this problem, the EOQ and ROP methods were implemented to determine the optimal order quantity and the appropriate point for placing a new order. The operational results following the implementation, observed during the period from January to March 2025, demonstrated that the company was able to fully supply the production department with raw materials in 100% of the total 283 withdrawals, with zero instances of material insufficiency. This study underscores the significance and effectiveness of applying EOQ and ROP in enhancing inventory management efficiency, mitigating raw material shortages, and supporting business operations in the highly competitive cosmetic industry.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
บทความ ข้อมูล เนื้อหา รูปภาพ ฯลฯ ที่ได้รับการตีพิมพ์ในวารสารฯ ถือเป็นลิขสิทธิ์ของวารสารฯ หากบุคคลหรือหน่วยงานใดต้องการนำทั้งหมดหรือส่วนหนึ่งส่วนใดไปเผยแพร่ต่อหรือเพื่อกระทำการใดๆ จะได้รับอนุญาต แต่ห้ามนำไปใช้เพื่่อประโยชน์ทางธุรกิจ และห้ามดัดแปลง
References
Mahmood S, Ashraf M, Khan A. Inventory management practices in SMEs: An EOQ and ROP analysis. Cogent Bus Manag. 2021;8(1):1922370. doi:10.1080/23311975.2021.1922370
Ahmad N, Sinha A, Puri M. Economic order quantity model in manufacturing SMEs. Mater Today Proc. 2021;46:6123-8.
doi:10.1016/j.matpr.2020.12.1061
Subakti A, Gunawan H. Cost minimization using EOQ method in raw material inventory. Int J Eng Trends Technol. 2023;71(1):70-5. doi:10.14445/22315381/IJETT-V71I1P211
Yuan Y, Cheong ML. EOQ model with uncertain demand and lead time: A robust approach. J Ind Eng Int. 2020;16(3):377-90. doi:10.1007/s40092-020-00341-1
Alfiah R, Rahman A, Yusnita I. Optimization of raw material inventory using EOQ and ROP method. J Phys Conf Ser. 2021;1933:012045. doi:10.1088/1742-6596/1933/1/012045
Hoseini S, Yousefi H. Inventory models in cosmetics and health industries under demand uncertainty. Oper Res Perspect. 2021;8:100195. doi:10.1016/j.orp.2021.100195
Hossen M, Uddin M. Application of EOQ and ROP in pharmaceutical supply chains. Heliyon. 2023;9(3):e13910. doi:10.1016/j.heliyon.2023.e13910
Patil V, Kulkarni A, Joshi S. EOQ models for inventory management during supply chain disruptions. Decis Anal J. 2022;3:100056. doi:10.1016/j.dajour.2022.100056
AlZubi A, Obeidat B, Al-Khawaldah R. Inventory management during pandemic disruptions: An EOQ-ROP perspective. J Open Innov Technol Mark Complex. 2023;9(2):56. doi:10.3390/joitmc9020056
Kandananond K. Application of EOQ model with predictive analytics. Int J Supply Chain Manag. 2020;9(2):45-53.
Mulyono H, Sari R, Pratama A. EOQ with decision support system for SMEs. Procedia Comput Sci. 2022;197:498-505. doi:10.1016/j.procs.2021.12.162
Jayusman H, Mahardika F, Ratih. Implementation of barcodes in the mobile-based Okeshop MSME inventory system. JIPI (Jurnal Ilmiah Penelitian dan Pembelajaran Informatika). 2025 Dec;10(4): 3113-23. doi: 10.29100/jipi.v10i4.6693
Souza RD, Carvalho MVN. Inventory management under continuous review models with stochastic demand. Int J Prod Econ. 2020;228:107749. doi:10.1016/j.ijpe.2020.107749
Saha AK, Ray S. Optimization of EOQ-based Q-model under supply chain disruptions. Comput Ind Eng.2021;150:106875. doi:10.1016/j.cie.2020.106875
Chen J. Periodic review inventory models with uncertain demand: A robust optimization approach. Omega.2021;104:102445. doi:10.1016/j.omega.2021.102445.
Li L, Govindan K. Sustainable inventory control using periodic review models under carbon regulations. J Clean Prod. 2021;318:128483. doi:10.1016/j.jclepro.2021.128483
โชติรส ตัณฑรังษี, พฤฒิพงศ์ อภิวัฒนกุล. การวิเคราะห์และปรับปรุงการบริหารสินค้าคงคลังโดยใช้ EOQ: กรณีศึกษาบริษัทนำเข้าสินค้าแก็ดเจ็ต. วารสารรัชต์ภาคย์. 2568;19(63).
ชุติเดช มั่นคงธรรม, ชิตพงษ์ อัยสานนท์, ปรียาภรณ์ ธีรพรเลิศรัฐ, เกียรติพงษ์ สันตะบุตร. การเพิ่มประสิทธิภาพในการจัดการอัตราคงคลังยาและเวชภัณฑ์ฝ่ายเภสัชกรรมในโรงพยาบาลของรัฐ. Interdiscip Acad Res J. 2025;5(3).
Shah M, Patel R. Optimizing safety stock levels under demand uncertainty. Int J Ind Eng. 2020;27(2):45-59. doi:10.23055/IJIE.2020.27.2.45
Tran T, Huynh N. Impact of lead time variability on safety stock in multi-echelon systems. Oper Res Perspect. 2022;9:67-79. doi:10.1016/j.orp.2022.100227
