OPTIMIZATION OF SPARE PARTS INVENTORY USING THE MONTE CARLO APPROACH (CASE STUDY OF PT. SMART TBK, EAST KALIMANTAN)

ABSTRACT : Inventory plays a crucial role in the supply chain and has a significant impact on a company‟s financial and operational performance. The substantial investment in inventory makes it one of the largest assets in the supply chain, with some companies holding inventory valued at over 25% of their total assets. The fluctuations in inventory activities often require careful control, particularly in the management of spare parts, which is a critical aspect of a company‟s operations. Ineffective management of spare parts inventory can negatively affect both financial performance and production. Therefore, optimal control is necessary to minimize the risk of excess or shortage of spare parts and to ensure optimal availability of these items. This study was conducted at PT. SMART, Tbk East Kalimantan, a publicly listed company operating in the palm oil plantation sector. The objectives of this research are to (1) determine the inventory parameters (s, S) for spare parts to achieve a desired availability level at an economical cost, (2) quantify the impact of changes in inventory parameters on service levels and the associated costs, and (3) evaluate the company‟s policies related to these costs. The Monte Carlo method was utilized in this study, considering the classification of spare parts into Fast, Normal, and Slow Moving categories. The results of the Monte Carlo simulation revealed the optimal total cost, and a sensitivity analysis indicated that changes in inventory parameters influence decision-making. In the final stage, forecasting was conducted to guide decision-making over the next five years.

KEYWORDS :Monte Carlo, Spare parts, Forecasting, Simulation