COST IMPLICATION ANALYSIS BETWEEN UNBALANCED SUPPLY PLANNING AND ACTUAL DEMAND IN A VITAMIN FMCG COMPANY

• Main Author: Ilham Iqbal, Mohamad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/68226
• Institution: Institut Teknologi Bandung

Demand planning or demand forecasting plays a significant role for a company. Especially for a product-based company such as FMCG company. Forecast served as a fundamental for planning and executing the supply chain. It drives the supply chain decisions such as production planning, raw material purchase, and supplier selection. The goal of these important decisions is to make the product is available at the right time and the right quantities for the customers. In other words, supply chain decisions lead to improving the customer satisfaction, minimizing the inventory levels, and maximizing the profitability. According to Chopra and Meindl (2012), the quality of sales and operations planning has a significant impact on the profitability of a firm. Therefore, all decisions in supply chain and operations planning have to be carefully considerate. Realizing the importance of the decisions related to the supply chain process, the forecast must be planned as accurate as possible. Especially in a FMCG company which the finished products and the raw material have their own shelf-life. The right amount and the right time are indispensable to avoid some financial losses such as material excess cost, production excess cost, risk of products perishability, and risk of stock shortage or loss of sales. However, forecasting accuracy is a big challenge. Variants often occurred between the forecast and the actual demand. A balance between product supply and product demand will result a positive impact for the company.