Production planning for SMEs: a case study in quilt products of hmon-oon group

Abstract

Nowadays, one of major problems of SMEs is improperly planning the production to serve for the true demand of customers. Therefore, this research was set the objective to apply forecasting techniques to predict the right demands and feed them together with other constraints as inputs for the LP model in production planning to get maximum profit and also conform to the restriction constraints such as production processes, sales volume, labor constraints, inventory and investment requirements. As a result from this study, the Decomposition Technique by Minitab program was the most accurate technique for sales forecasting of Quilt Products of Hmon-Oon Group. The sales forecasting information was then used as input to a mathematical model (LP) targeting maximized profit processing by Solver program in Microsoft Excel 2010. Eventually, the business can gain more benefit by using this method from 358,830 Baht in one quarter to 504,425 Baht or 40.57% increase. Cost of inventory decreases from 17,764 Baht to 16,670 Baht or 6.16% decrease. Production labor hours in one quarter decreases from 2,984.12 hours to 2,378.77 hours or 20.29% decrease