Purchase Order Selection Model At CV. Rooesman Indonesia Using Analytic Network Process

Abstract

The research in this paper was done in CV. Rooesman, a small scale shoes and bag manufacturer company located in Yogyakarta Indonesia. Their strategy to response the demand is make-to-order. This company receives many purchase orders from several countries such as Japan, South Korea, and USA. Each purchase order is unique for example in term of design, complexity of the production process and raw material needed. Currently CV. Rooesman has difficulty to select which purchase order should be accepted. Ideally, all purchase orders from the customers have to be accepted. However due to the some factors such as limitation of resources that the company have i.e. human resources (number of workers and skill of workers needed) and other factor such as characteristic of the purchase order the company have to select which purchase order should be accepted. It happened in the past that the company accepted the purchase order without considering those factors then the order was not be able to deliver on time and the quality of the products did not meet the expectation of the customer. As a result, the company paid the penalty and the products were rejected by the customer. The research in this paper therefore tries to model purchase order selection problem using Analytic Network Process. There are four clusters considered in the model which are: Characteristic of the Purchase Order (Design of the Product, Quantity Order, Characteristic of the Customer, and Expected Quality), Complexity of the Production Process (Number of Workers Needed, Ability to Make the Prototype, Manufacturing Lead Time, Skill of the Worker), Economical Value (Production Cost, Selling Price and Price of Raw Material), and Alternative Purchase Order (Purchase Order 1, Purchase Order 2, Purchase Order 3).