DEMAND FORECASTING AND SAFETY STOCK CALCULATION AT PT. XXX

• Main Author: YULIANI, JESSICA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/28273
• Institution: Institut Teknologi Bandung

PT. XXX as one of the uniform fabric manufacturer Indonesia has a large potential market. <br /> <br /> Serving a large demand, manufacturing firms face difficult challenges, one of them is satisfying all <br /> <br /> customers’ order in short amount period of time. Production and inventory holds an important role on <br /> <br /> supply chain in manufacturing firm therefore, it is important to manage and improve the operation and <br /> <br /> inventory system without disturbing the firm’s cash flow and viability. One of the way PT. XXX use to <br /> <br /> fulfil orders from customers and become market leader is by utilizing safety stock. Based on the data <br /> <br /> collection, PT. XXX lacks of forecast method, so they utilize the machine capacity that leads to high <br /> <br /> excess inventory. <br /> <br /> Supply chain management is the broad range of activities required to plan, control and execute <br /> <br /> a product's flow. Although all aspects in supply chain management are very important, in PT. XXX, <br /> <br /> demand planning, production, inventory management and storage are the main process in the factory. <br /> <br /> The purchasing department, spinning manufacture department and weaving manufacture department <br /> <br /> hold important role in production system. These departments should make a forecast each month that <br /> <br /> will be used as production target for the production teams. It is important to produce the products at an <br /> <br /> effective number so that the warehouse not holding too much inventories. <br /> <br /> The lack forecast method of the company will affect the production, especially number of <br /> <br /> production output. If the demand of from the customer is not as much as the production target, the <br /> <br /> bulking in the inventory level eventually will happen. The alternative solutions suggested is to proposed <br /> <br /> a forecasting method that suitable for the company and determining proper safety stock, so that the <br /> <br /> stock out will not occurred and the value of inventory will also not affect the cash flow of the company. <br /> <br /> Time series analysis method is chosen for the forecasting method, as for the safety stock calculation the <br /> <br /> fixed-order quantity model and fixed-time period model is used. Purpose of this research is to develop <br /> <br /> forecasting method and optimize the inventory system by finding the best safety stock method in PT. <br /> <br /> XXX. <br /> <br /> After analyzing and doing some calculation, some conclusion can be drawn. First, the best <br /> <br /> method to forecast demand in PT. XXX is using the time-series analysis. After comparing the result, <br /> <br /> the exponential smoothing is the best method for PT. XXX to use, it has the least MAD and MAPE, <br /> <br /> also better TS. The EOQ model is chosen to calculate the fibre safety stock as for the Fixed-Time Period <br /> <br /> Method is chosen for the yarn and fabric safety stock calculation in PT. XXX. <br /> <br /> Keywords – demand forecast, economic order quantity, inventory value, fixed-time period