Optimized Inventory Control Cuts Costs for Maluku Nutmeg Juice Producer

Ilustration by AI 

FORMOSA NEWS

Small-scale agro-industrial businesses can drastically reduce operating expenses and eliminate raw material shortages by abandoning informal purchasing practices in favor of mathematical inventory models. A study conducted by researchers Rahmatia Lilisula, Stephen F.W. Thenu, and Weldemina B. Parera from Pattimura University analyzed raw material inventory management at UD Tomasiwa, a micro-enterprise producing processed nutmeg juice in Morella Village, Central Maluku Regency. Published in August 2026, the investigation demonstrated that applying mathematical inventory control methods can cut annual inventory costs for the enterprise by more than 80 percent while guaranteeing production continuity.

Economic and Policy Context

Nutmeg juice represents an innovative value-added derivative of fresh nutmeg flesh, serving as an important driver of economic growth for micro, small, and medium enterprises (MSMEs) in Eastern Indonesia. Despite its market potential across Maluku and national trade channels, local processing operations often rely on informal estimation and seasonal intuition rather than structured inventory systems. This reliance on unscientific purchasing frequently leads to inflated storage costs, stock exhaustion, or supply chain halts. As regional governments in Maluku seek to strengthen food security, rural industrialization, and agricultural supply chains, implementing cost-effective inventory frameworks offers a scalable solution to boost MSME competitiveness.

Research Methodology

The research utilized a mixed-methods design incorporating qualitative enterprise profiling and quantitative inventory modeling based on primary data gathered through direct observations and semi-structured interviews at UD Tomasiwa. The authors evaluated annual raw material usage, procurement costs, and storage fees to model optimal purchasing decisions. To determine the most efficient inventory structure, the analytical framework applied four core operations management formulas:

• Economic Order Quantity (EOQ): Calculated the optimal batch size per purchase order to balance ordering and storage costs.
• Safety Stock (SS): Established a reserve cushion using standard deviation calculations to protect against supply chain volatility.
• Reorder Point (ROP): Identified the exact inventory threshold at which new procurement orders must be placed.
• Total Inventory Cost (TIC): Measured aggregate annual inventory expenses under the optimized system versus existing informal practices.

Key Findings

Field evaluations showed that UD Tomasiwa processes an average of 2,467 nutmeg fruits (74 kilograms of nutmeg pulp) per batch, with an annual consumption of 180,800 fruits averaging 13,230 fruits per month. The enterprise previously executed 59 separate raw material purchases per year, incurring IDR 50,000 per order in transport expenses alongside annual electricity-based holding costs of IDR 4,200,000 (IDR 23 per fruit).

The empirical analysis yielded significant optimization figures:

• Optimal Order Quantity: Applying the EOQ model established an optimal order size of 28,037 nutmeg fruits per purchase.
• Reduced Purchase Frequency: Adopting the EOQ batch size reduces required procurement runs from 59 times per year down to 6 or 7 times annually.
• Safety Stock Buffer: To prevent stockouts during peak production demand or supplier delays, the enterprise must maintain a safety stock cushion of 19,314 fruits.
• Reorder Threshold: Because local suppliers deliver directly without fixed lead times, the reorder point equals the safety stock level, indicating that new orders should be triggered as soon as stock drops to 19,314 units.
• Massive Cost Reduction: The total annual inventory cost under the EOQ model totaled IDR 644,856, representing a dramatic decrease from the company's historical inventory expense of IDR 3,254,290.

Real-World Impact and Industry Implications

The findings illustrate that micro-enterprises operating in remote island communities can achieve immediate financial sustainability through structured operational modeling. By consolidating procurement into 6 to 7 calculated orders per year, processors eliminate redundant transportation costs and prevent operational disruptions, such as the complete production stoppage observed at UD Tomasiwa during December. For agricultural policymakers and small business development agencies, training rural food processors in basic EOQ and safety stock metrics provides a zero-capital method to enhance supply chain resilience, reduce waste, and expand regional manufacturing profitability.

Expert Insight

Underlining the practical advantages of formal inventory control for local processors, the authors emphasized:

"The application of the Economic Order Quantity (EOQ) method indicated an optimal order quantity of approximately 28,037 units per order, with an ordering frequency of 6 to 7 times per year... thereby reducing inventory costs and minimizing the risk of raw material shortages."

Author Profiles

• Rahmatia Lilisula, S.P. is an agricultural economics researcher at Pattimura University specializing in agribusiness management, regional commodity development, and micro-enterprise operations.
• Stephen F.W. Thenu, M.Si. is a faculty member and senior researcher in the Department of Agricultural Socio-Economics at Pattimura University, focusing on supply chain management and agricultural economics.
• Weldemina B. Parera, M.Si. is an academic and researcher at Pattimura University whose expertise spans agribusiness evaluation, local food production systems, and rural enterprise development.

Source Section

Article Title: Analysis of Raw Material Inventory Management for Processed Nutmeg Juice Products (Case Study in UD Tomasiwa, Morella Village Leihitu District, Central Maluku Regency)
Journal Name: International Journal of Integrative Sciences (IJIS)
Publication Year: 2026
DOI: https://doi.org/10.55927/ijis.v5i8.62
URL : https://journalijis.my.id/index.php/ijis/index