Internal Control Strategies to Mitigate Inventory Losses in Palm Oil Plantations: A Case Study of PT XYZ

Abstract

This study evaluates the internal control mechanisms governing
supporting inventory at PT XYZ, a palm oil plantation. Inventory plays
a crucial role in the production process, as inadequate stock levels can
hinder operational efficiency. However, ineffective inventory
management may result in losses due to damage or spoilage, rendering
materials unusable in palm oil production. Employing a qualitative
research design with a case study approach, this study incorporates a
literature review and interviews with relevant stakeholders to identify
the root causes of supporting inventory losses and propose targeted
recommendations. The findings suggest that PT XYZ should integrate
supporting inventory into its risk assessment framework, enhance
interdepartmental coordination, transition from manual to electronic
inventory management systems, and establish standardized operating
procedures (SOPs) for currently unmitigated risks. These measures
would help prevent inventory losses stemming from damage or
expiration, thereby strengthening overall internal control.