Capacity Planning and Assembly Line Balancing for Long-Term Routine and Short-Term Intermittent Demand in Small Medium Enterprises

Abstract

Small Medium Enterprise (SME) of Doll Producer in Bandung has two types of buyers. The first type of buyers is long-term & routine doll design buyer (the client) and the second one is short-term & intermittent buyers (customers). Although most of the SME’s revenue comes from the client, the SME unable to fulfill the demand of the client at a time. However, demand from customers can be met, since the SME always prioritize the shortest due time contract. To solve the problem, balancing of the assembly line by using the U-Line mathematical model is done. The U-Line is appropriate for the problem since the SME has a small room for the assembly activities. After that, the assembly line capacity is calculated as the basis to allocate resources for both the client and customers project. The model suggests that the SME must allocate 2 different assembly line (4 work stations & 3 work stations) for the client projects and 3 parallel assembly line (3 work station each) for customers. Based on the simulation, the SME’s capacity is improved up to 36.5% and the smoothness index are 22.14, 10.94, and 7.5 for the first client, the second client, and customers project assembly line respectively.