Managing Inventory and Production in an SME through ABC Categorization and an Optimization Approach

Yarlinie Sukumaran and Suliadi F. Sufahani
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Yarlinie Sukumaran: Department of Mathematics and Statistics, Faculty of Applied Sciences and Technology, Universiti Tun Hussein Onn Malaysia, Pagoh Campus, 84600 Pagoh, Johor, Malaysia
Suliadi F. Sufahani: Department of Mathematics and Statistics, Faculty of Applied Sciences and Technology, Universiti Tun Hussein Onn Malaysia, Pagoh Campus, 84600 Pagoh, Johor, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 4, 1750-1763

Abstract: Small and medium-sized enterprises (SMEs), which make up over 97.2% of all businesses, play a crucial role in Malaysia’s economy by contributing significantly to GDP and employment. For these enterprises to maintain steady growth, production activities must be optimized to maximize resource utilization. This research highlights the vital role of effective production planning in stimulating growth and maximizing profits for SMEs in Malaysia. Acquiring data from a local SME, ABC categorization and optimization approach are employed in this study. A comparative analysis of linear programming and integer linear programming for profit maximization successfully reveals the potency of integer linear programming for profit maximization in real world scenarios, demonstrating a 4.53% increase in annual profit.

Date: 2025
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