A Forecast of Goods Demand to be Ordered and Stored at Optimal Levels for the Operating Results of Otto Kingglass Company Limited

Abstract

The objectives of this research were 1) to study forecasting of the demand for goods to order and store at the appropriate level and 2) to study the forecast of product demand for ordering and storage at the appropriate level that directly positively affects the performance of the company using mixed research. The sample consisted of 132 employees in the Warehouse and Purchasing Department of Otto King Glass Company. The tool for action research uses an economic ordering model (EOQ) analysis to calculate the optimal order quantity. The quantitative research tools use questionnaires. The data was analyzed using EOQ formulas, descriptive statistics, and multiple regression analysis The findings of this research showed that 1) EOQ analysis resulted in an optimal inventory level of 924,296 pieces/year; a reduction in storage costs of 23%/year; a reduction in the opportunity cost of out-of-stock 9,800 pieces/month; and warehouse space. The size of 689.83 square meters, which from this result helps to reduce the amount of inventory at an appropriate level to 149,587 pieces/year, or 13.45%, can reduce the cost of storage to 13%/year. In addition, it can reduce the opportunity cost of out-of-stock to 14,461 pieces/year, or 59.16 percent, and can increase the storage space in the warehouse to 108.5 square meters. 2) Forecasting the demand for products using EOQ has a direct positive effect on the reduction of storage costs. Moreover, product classification and sorting have a direct positive effect on reducing shortage opportunity costs, and inventory reporting and meetings have a direct positive effect on warehouses with more storage space. Therefore, companies should adopt EOQ as well as categorize and sort products. In addition, inventories are reported and meetings are held every month.