FORECASTING DEMAND AND SAFETY STOCK CALCULATION AT PT. KUTAI READY MIX

• Main Author: Tona Hansel Silitonga, Davin
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/67630
• Institution: Institut Teknologi Bandung

The relocation of the capital city to the province of East Kalimantan will encourage investment in the region and its nearby areas for growth and development. Naturally, this will also be financially advantageous, particularly for the service and construction industries. PT. Kutai Ready Mix is a company engaged in the manufacture of ready-mix concrete industry, especially for the Balikpapan area. Currently, the company's annual casting capacity for ready mix concrete is 70,600 m³ or about 98%. But in 2021, the company only reaches the service level target of 79.4%. The total difference in profit from the target and actual casting in 2021 is 7,179,647,996 billion rupiah. To meet casting demand which has high uncertainty, companies need to find the right strategy in managing casting demand, one of which is by optimizing safety stock. Based on data collection, PT. Kutai Ready Mix does not apply the Forecast method for casting requests and safety stock planning which is only based on estimates and previous experience. The absence of a forecast method applied to the company and also the application of poor safety stock will affect the production process, especially the large number of casting requests that are not served due to the company's inability to meet the number of casting requests. With this research, the suggested alternative solution is to propose the company to use the forecast method to find out the estimated future casting demand. In this research, the time series analysis method is used as a forecasting method, while to calculate safety stock, a comparison is made using 3 formulas, namely Average-Max, Uncertainty only on Demand and Uncertainty Demand and Lead Time. By knowing the casting demand forecast, the company can find out how many casting requests are and can estimate the amount of material that must be ordered. Also, the company can determine how much safety stock is needed so that there is no casting demand that is not served due to out of stock. After analyzing and calculating, some conclusions can be drawn. First, the best forecast method for forecasting casting demand at PT. Kutai Ready Mix is Brown’s Double Exponential Smoothing because it has the smallest MAD, MSE, MAPE values. Then for safety stock, after analyzing based on the results of the AHP questionnaire, the AverageMax formula was chosen to be used in calculating safety stock and reorder points at PT. Kutai Ready Mix.