Improper planning of inventory will affect the factory operating costs, building costs, the cost of loss, and the cost of product defects due to being stored for too long which will eventually become a loss. This research discusses the processing industry which is experiencing lumpy demand. In carrying out the production process, the company has never made plans for future demand, resulting in a waste of message costs due to repeated orders of raw materials ordered to suppliers. This paper contributes to overcoming this issue by simulating future demand by using the Material Requirement Planning (MRP) method with a probabilistic Economic Order Quantity (EOQ) and Periodic Order Quantity (POQ) model. The demand in the coming period is determined using the Autoregressive Integrated Moving Average (ARIMA) method, and an aggregate plan is carried out to determine the regular cost of raw material production and optimal subcontracting. The final analysis states that the calculation of MRP on the selected items using POQ produces the lowest cost for planning S45C-F, SGT-R, and SKD11-R, while SLD-R uses the probabilistic EOQ method.

The objective of this research is to minimize product defects based on labor performance and prove the hypothesis on how labor performance affects the quality of a product through a scientific calculation using Overall Labor Effectiveness (OLE). The primary data is obtained by interviewing the supervisor and labor directly. For secondary data is obtained from the company, such as labor working time, machine scheduled downtime, total production, and defective products. The approach to extract the data is using OLE and the continued regression method. Furthermore, it proceeds to Six Sigma using the DMAIC approach since the results show a significant correlation. The result from Failure Mode and Effects Analysis (FMEA) shows four of six potential failures caused by product defects are coming from labor. To prevent failure mode, it is recommended to have the regular machine checked by labor, check the temperature of the machine, and provide Standard Operating Procedures.