Optimizing Inventory Control in Rural MSME an Integrated Application of EOQ, Reorder Point and Safety Stock

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in Indonesia’s economy; however, many rural MSMEs continue to rely on intuitive and informal inventory practices, resulting in inefficiencies, elevated costs, and production disruptions. This paper presents an integrated framework for optimizing inventory management in rural MSMEs through the combined application of Economic Order Quantity (EOQ), Reorder Point (ROP), and Safety Stock methods. Employing a descriptive quantitative design, the study was conducted at the Sri Tanjung Cracker Factory in Indramayu using primary data from interviews and direct observations, complemented by secondary data from purchase and inventory records. The empirical findings reveal that implementing EOQ reduced total annual inventory costs from Rp 91,689,449 to Rp 43,360,000 (a 52.7% reduction), while the calculation of ROP and Safety Stock ensured more reliable and consistent raw material availability. This integrated approach demonstrates significant potential to enhance cost efficiency, improve operational stability, and support evidence-based decision-making, thereby establishing a scalable model for sustainable inventory management in rural MSMEs.