<![CDATA[A pulp and paper company had a chemical raw materials piling-up issue, which affected its quality and increased its inventory cost. Hence, a proper inventory control policy of these is needed. This research were aimed to analyze the company‘s inventory control policy on its chemicals and inventory cost in the period 2012-2013 and recommend the inventory control plan for the year 2014. The lot sizing techniques of Lot for Lot, Economic Order Quantity, Least Unit Cost, and Least Total Cost were investigated and the results were compared with the company’s inventory cost. The chemicals inventory cost for the year 2014 was also determined based on chemical estimates needed in the year 2014. Chemical estimates were derived from forecasted monthly pulp production in the year 2014 that obtained by the least square dummy variables regression technique using the monthly pulp production data in the period 2012-2013 and the company’s Standard Operating Procedures. The results showed the company’s inventory cost was 6.34% higher than inventory costs calculated by those four techniques when company failed to maintain its ending inventory to the predetermined safety stock level. Otherwise, the company could keep its chemicals control policy in the year 2014.Keywords: cost analysis, inventory cost, inventory control, lot sizing techniques, pulp production]]>
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