Optimization of saving production cost in plastic jute sacks with dynamic programming

Abstract

The plastic jute sack is one of the most popular rice packaging products in the market. One type of plastic jute sack used is LDPE type. The LDPE sacks used for rice packaging often-experiencing fluctuations in market demand. Fluctuating demand is a certain problem for companies in determining the number of production to meet the demand. It can be seen from the frequent over production companies and stock out at each period. Overproduction problem has an impact to increase production costs. Stock resulted in lost sales experienced adversely affected the company, especially from production cost. Based on the problems, the company must immediately performs an optimal production planning to handle various problems in the company. One method for saving the optimal cost production can be used is dynamic programming. This method aims to obtain the optimal number of production accordance to market demand. This research is done to reduce cost by optimizing number of production. Method that used to solve the problem is dynamic programming. By using this method, the company will obtain optimum production number with minimum production cost and considering total capacity available of the company. From the dynamic programming results obtained optimal production number with cost savings about 2.1%.