Capacity Planning Of Additional Production Capacity Project: Study Case XYZ Coffee

Abstract

XYZ Coffee is a micro, small, and medium enterprise producing specialty green coffee beans, Arabica Kamojang. XYZ Coffee has a problem related to a gap between its production capacity and demand. The annual production capacity of XYZ Coffee for green coffee beans has reached 15 tons. Due to the increase in annual demand and the company’s wish to expand its domestic and international market, XYZ Coffee plans to increase its production capacity. XYZ Coffee’s production process is uneven because it depends on the harvest period, from April until August. Since this will be the first time XYZ Coffee plans an additional production capacity project, the company does not know how to design the detailed capacity planning and check whether it will be feasible and beneficial financially. The purpose of this research is to investigate the detailed capacity planning for the XYZ Coffee to produce 50 tons of green coffee beans per year in order to meet customer demand both domestic and international, to find out whether the additional project is feasible, and to find out the variable that is greatly affected the project feasibility.

Keywords: Coffee Green Bean, Production Capacity, Capacity Planning, Monte Carlo Simulation, Sensitivity Analysis