Forecasting and aggregate planning application – a case study of a small enterprise in Indonesia

Abstract

A good and interconnected demand and supply planning (D&SP) is essential for firms, as it will give better allocation of resource and enabler to stay competitive. The basic and simple applications of D&SP are forecasting and aggregate planning which mainly used in big corporations, but less in small and medium enterprises. The research was a case study in a small firm in Indonesia, which started as small and family-owned company, but can enjoy the benefit of simple demand and supply planning to enhance its cost and productivity. Despite main application of D&SP in every production environment, no vast research has been done in the last couple of decades. The study and the case are thus, a refreshment on how application of D&SP still relevant. The case study examined seven common forecasting tools for demand planning side and exercised classical chase and level aggregate planning strategy for the supply planning side. It explored three possible scenarios and recommended a better scenario with 3% cost saving for the company.