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The Implementation of Demand Forecasting and Aggregate Planning in Small Medium Enterprises of Furniture Products in Jepara City, Central Java Province, Indonesia.

Muhammad Luthfi Mishbah, Yuanita Handayati, Noorhan Firdaus Pambudi

Abstract


Abstract. Struggling with the advancement of competition in furniture industry in recent years, local small medium enterprises in Jepara has difficulties in managing demand that cause an oversupply and undersupply condition which influenced directly to its production cost and indirectly to its competitive advantage in a global furniture market. This research aims to find the most suitable demand forecasting and aggregate planning that can give the optimum result to the company’s demand forecast and the production planning. Time series forecasting will be used in this research. For the aggregate planning method author compare level strategy, chase strategy, and linear programming strategy to find the optimum production cost. The result of this research shows that the most optimum demand forecast for the company is Winter’s Model, this method shows the smallest error among the others method. This method also can decrease the excess stock loss value by IDR 564,487,762. The result from forecasting then used to find the optimum production planning. The result shows that linear programming strategy is the optimum aggregate planning for the company. This strategy can decrease production cost in 2019 to IDR 115,075,000.

Keywords: Furniture Industry; Local; Demand Forecasting; Aggregate Planning; Production Cost

 


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