A LINEAR PROGRAMMING METHOD TO ENHANCE RESOURCE UTILIZATION CASE OF ETHIOPIAN APPAREL SECTOR

Abstract

The Ethiopian industrial development strategy is characterized by export-led and labor intensive industrialization. The country is emerging as the most important investment destination in its apparel sector. Thought this sector is expected to generate more income from the export market, its export earnings remain trivial mainly due to the inefficient organizational resource utilization. One of the competent techniques that help companies to efficiently improve the use of their resources to increase their profit is linear programming. In apparel manufacturing firms, efficient use of materials such as fabrics and sewing threads and processing time at different stages of production as well as minimization of labor and materials cost are necessary to enhance their profitability. Cutting, sewing, and finishing operations deserve more attention for apparel process optimization. However, the issue of proper resource allocation remains an unsolved problem within the Ethiopian apparel industry. The aim of this research is to devise efficient resource utilization mechanism for Ethiopian apparel sector to improve their resource utilization and profitability, taking one of the garment factories engaged in the export market as a case study. Five types of products the company is currently producing, the amount of resources employed to produce each unit of the products, and the value of profit per unit from the sale of each products have been collected from the case company. The monthly availability of resources utilized and the monthly production volume of the five products have also been collected from the company. The data gathered was mathematically modeled using a linear programming technique, and solved using MS-Excel solver. The findings of the study depicts that all of the organizational resources are severely underutilized. This research proved that the resource utilization of the case company can be improved from 46.41% of the current resource utilization to 98.57%. This indicates that the new solution provides very significantly improvement in organizational resource utilization. At the same time, with the new solution, the total profit per month of the case company can be increased from 365,699 birr per month to 897,844 birr per month (i.e., with an increment of 145.5%). Finally, it is concluded that this remarkable profit increment of the company can certainly enhance its global competitiveness.

Keywords

• apparel sector
• linear programming technique
• resource utilization
• optimal solution