AN ANALYSIS OF PURCHASING AND INVENTORY CONTROL PROBLEMS OF PACKAGING EQUIPMENT IN MULTI-BRANCH COFFEE BUSINESSES: APPLYING THE EOQ MODEL FOR COST REDUCTION AND STOCKOUT PREVENTION

Abstract

The study titled “An Analysis of Procurement and Inventory Control Problems of Packaging Materials in Multi-Branch Coffee Shop Businesses: An Application of the EOQ Model for Cost Reduction and Stockout Prevention” examines the effectiveness of applying the Economic Order Quantity (EOQ) model to improve procurement and inventory control efficiency. Based on an annual demand (D) of 221,493 units, an ordering cost (S) of 800 Baht per order, and a holding cost (H) of 0.05 Baht per unit per year, the optimal order quantity (EOQ) was calculated at 84,189 units per order. This level minimizes the total cost of ordering and holding inventory, resulting in an annual total cost of 4,209.45 Baht, with ordering and holding costs each at 2,104.72 Baht, reflecting cost equilibrium. The optimal ordering frequency was found to be 2.63 times per year, or approximately every 119 days. Furthermore, the Reorder Point (ROP) was determined at 5,057 units, with a Safety Stock (SS) of 87.31 units, maintaining a 95% service level and reducing stockout risk during the 7-day lead time. Overall, the study demonstrates that implementing the EOQ model can significantly reduce total operational costs, improve purchasing efficiency, and enhance inventory management for multi-branch coffee shops. The findings align with previous studies by Nguyen and Le (2023) and Puspitasari and Lestari (2022), affirming that systematic EOQ and ROP applications strengthen cost efficiency, ensure service continuity, and support long-term supply chain sustainability.