Determination of optimal production planning in palm oil company (Case study)

This case study was conducted at a company engaged in the processing of palm oil into Crude Palm Oil (CPO). During this time, the company's factory is not operating effectively and efficiently. The production planning in the company is done with estimation that based on past demand. But the estimation made less effective because the companies are often faced with some situations such as incompatibility between production volume demands with fluctuates demand. The impact of production and mismatch of demand volume results a high opportunity cost loss. This research will use an approach to optimize production planning by using goal programming. This method is used to perform the maximization or minimization of resources from several owned company with the objective function. Goal programming is a mathematical model that is deemed suitable for solving multi-purpose problems because of using variable deviation. The purpose of the study is to plan optimal amount of production with a view to capacity constraints, material and resources provided by the company to lower the cost of opportunity lost. The specific objective of this study is to determine the determinants of production planning, conducting formulation factor constraints and objectives as well as optimization of the number of products produced. The achievements obtained from the optimization of production planning for 12 periods (one year) are respectively 66%, 67%, 58%, 64%, 73%, 81%, 84%, 95%, 96%, 86%, 80% and 75%. This study proves the success of this method applied to the company, so the company can plan production more optimal than before.