Track: Production Planning and Control

Abstract

Planning and controlling material supply are vital things for a company to support the activity of the production process. The tea industry is no exception; this industry requires material planning to optimize its company. Thus, this paper aims to explore the implementation of MRP and demand forecasting to increase the overall efficiency by focusing on the tea industry. The company studied for this paper is CitraTea, which uses a make-to-stock system to optimize inventory and minimize costs. For demand forecasting, we use Holt-Winter’s method to forecastthe customer demand for the next 12 months. We also use the Economic Order Quantity method in making the Material Requirements Plan. As a result, the benefit-cost ratios of the 250 ml and 500 ml products before the improvement are 1.738 and 2.027, respectively. Meanwhile, the benefit-cost ratios after improvement are 2.281 and 2.817, respectively. These results indicate that an increase in the benefit-cost ratio has occurred. The result of analysis, calculation, and validation has shown that the implementation of the demand forecasting and MRP in the company helps reduce costs and increase the company's profit.