Reference no: EM133357510

"PT. Sepatu Andalankoe" is a shoe manufacturing industry made of synthetic leather for adults, and

operates in the Bandung area. Currently PT. Sepatu Andalankoe sell various footwear to all cities in Indonesia, and by 2023 they are planning their sales plan for the next 6 months as follows (in pairs):

Each product consists of 3 parts: Outsole, insole, and leather for the upper. For all models, a pair of shoes requires a pair of insole and outsole. Whereas the upper part of the shoe is made of synthetic leather, model A requires 0.25 m2/shoe, model B requires 0.2 m2/shoe and model C requires 0.3 m2/shoe. PT. Sepatu Andalankoe supply raw materials from 2 different suppliers, "PT. Sol Awet Sedjati" supplies both inner and outer soles, "CV. Kulit Kuat Sekali" supplies the leather for the upper shoe.

The raw materials for the inner and outer soles are sold in sheets but from different materials, and can produce 50 pcs/sheet for the outer sole material, and 75 pcs/sheet for the inner sole material. Meanwhile, synthetic leather for the upper part of the shoe is sold in sheets of 8 m2. It is known that the raw material costs for insole, outer sole and leather are sold for Rp.200,000/sheet, Rp.225,000/sheet and Rp.250,000/sheet, respectively. The administration fee for each order is Rp.500,000/ order , and the transportation including loading and unloading costs are Rp.2,500,000/order for 1 destination, with an additional Rp.500,000/destination. The cost of storing raw materials at PT. Sepatu Andalankoe is 0.3 of the cost of raw materials. The working days in PT. Sepatu Andalan Koe is 24 days/months.

In production activities there are no differences in time, treatment and work steps, so that each product can be carried out by any group and at the same time. One day there is only 1 shift available. The cost components are also known as follows:

1. how would you plan an aggregate production plan based on the sales plan of PT Sepatu Andalankoe, if (1) the number of workers employed is constant and the utilization is 100% (2) all new workers are recruited at the beginning of the year (3) all products are self-produced.
2. What is the Economic Orders Quantity for each raw material, assuming the monthly production rate is stable based on the results of point 1, and the transportation is carried out simultaneously for all raw materials.
3. (a) How much is the total annual order cost using the EOQ value from point 1? (b) how does it affect the order quantity and total annual order cost if the truck capacity can only accommodate 500 pieces (mixed products) compared to no truck capacity?
4. Assuming the use of daily raw materials is constant according to production demand on point 1, and the Order Quantity for each raw material is in accordance with point 2, with the order lead time from placing the order until the goods arrive at PT. Sepatu Andalankoe are the same for all suppliers for 6 working days, calculate the Reorder Point for the supply of All raw materials.