Chevalier

Operational Research
Felix Michael Sanjaya
1715101

Abstract
The purpose of this study is to investigate and understand the barriers and optimize the
combination of products in production quantities to gain maximum profit in Chevalier This
study used quantitative approach with survey to collect data. Analysis used forecasting and
linear programming method. This analysis was used to combine the right amount of products
to get maximum benefit of Chevalier The results achieved in this research is to know the
company in the form of barriers to raw material shortages of 875 m2, labor hours by 4,368
hours, demand forecasting as many as 230 pairs of school shoes, 344 pairs of sports shoes,
450 pairs of shoes and formal employment. The company also had to produce 230 pairs of
school shoes, 344 pairs of sports shoes, 450 pairs of shoes and formal employment. Based on
the results obtained, research suggested Chevalier makes plans to increase production and to
improve the company needs to expand its production or marketing of products territorial
expansion.

Background

Shoes are a necessity and lifestyle for the community in carrying out daily activities, ranging
from formal shoes to the office, shoes for sports, shoes for attending parties, school shoes,
and others. This is what underlies Footwear Distributors and Retailers of America to declare
their commitment to invest and diversify sourcing of footwear production from China to
Indonesia. This was done by solving various problems that could hamper trade and
investment cooperation between the Indonesian and US shoe industries.

The tight competition in the Indonesian shoe industry does not only come from abroad but
also from within the country. The number of new players in the market resulted in companies
having to work more to be able to survive and develop the business. For that, the company
must get profits that will later be used to expand the market.

Chevalier is a company engaged in the field of outsole, insole, and shoes supply. In carrying
out its activities, the company faces constraints of fluctuations in demand so the company
must store the rest of the goods produced in the storage warehouse. This resulted in the
arising of storage costs which have an impact on the reduced profits derived by the company.

Linear programming method is the right method for solving problems experienced by
companies. The linear programming method helps the company by combining variations of
existing products based on the company's limited resources. Thus the company can make
optimal production to obtain maximum profits.

Theoretical Basis

Operations research is the application of scientific methods, techniques and tools in dealing
with problems that arise in company operations with the aim of finding optimal solutions.
One method in operations research is forecasting as used in this research. Forecasting can be
done by involving past data collection and placing it into the future with a form of
mathematical model. With good forecasting it is expected that waste will be reduced, can be
more concentrated on certain targets, better planning, so that it can become a reality.

After forecasting is made, then the calculation is carried out using the linear programming
method. The definition of linear programming is a mathematical application technique in
determining problem solving that aims to maximize or minimize something that is limited by
certain limitations. This is also known as optimization technique.
The linear program model can determine the value of the decision variables contained in the
linear program model. The method that can be used to find solutions from the linear program
model is divided into 2, namely: Graph Method and Simplex Method. The graphical method
is used if the number of decision variables in the linear program model are two decision
variables (= 2 variables). The simplex method is used if the number of decision variables in
the linear program model is at least two decision variables (≥ 2 variables).

Method

In principle, the data needed and analyzed in this study comes from secondary data. For this
reason, several data collection methods are used, which consist of literature, observation and
interviews. The sampling technique used is probability sampling, which is a sampling
technique that provides equal opportunities for each member of the population to be selected
as a sample member.

The problem faced is how to make decisions by utilizing available data to solve problems
with goals that are limited by certain limitations. This problem can be overcome by utilizing
linear programming or linear programming methods. There are 2 types of linear
programming methods, namely: the graph method and the simplex method. In this study the
simplex method will be used, because the decision variable used is more than 2 variables or 2
products. The simplex method is designed to solve all linear programming problems, both
involving two variables or more than two variables. The simplex method is the most
successfully developed technique for solving linear program problems that have a large
number of decision variables and constraints.

The initial steps that must be determined in solving problems with the linear program method
are to determine 3 main factors, namely: (1) Decision variables; what products will be
produced and how many units will be produced in a certain period; (2) objective function;
Zmax = c1x1 + c2x2 + c3x3 + c4x4 + c5x5 + c6x6; (3) Constraint Function; limitations in
achieving goals:

a11x1 + a12x2 + a13x3 + a14x4 + a15x5 + a16x6 ≤ b1 a21x1 + a22x2 + a23x3 + a24x4 +
a25x5 + a26x6 ≤ b2 a31x1 + a32x2 + a33x3 + a34x4 + a35x5 + a36x6 ≤ b3

Information

cj = value of profit per unit for each xj

xj = varable jth decision

aji = resource needs i for each xj

bi = number of available resources

j = number of decision variables starting from 1,2,3 ... j.

i = many types of resources used starting from 1,2,3 ... i.

After that, using the simplex table method to complete the calculation to obtain a solution for
maximum profit.
The basic assumptions of linear programming are as follows

• Certainty  The coefficients in the objective function (cj) and the constraint function
(aji) can be known with certainty and do not change.
• Proportionality in the objective function and constraint function  All
coefficients in the formulation, cj and aji, are coefficients that are variable to the
magnitude of the decision variable.
• Additivity  Total activities are equal to the number (additivity) of each individual
activity.
• Divisibility  Solution of linear programming problems (in this case the value of xj)
does not have to be in integers.
• Non-negativity  Decision variables cannot be negative.

Result and Discussion

Problem solving in this study uses linear programming methods, which consist of decision
variables, objective functions, and constraint functions. Decision variables are the three main
types of products that companies produce. The objective function is a function to obtain the
maximum profit consisting of the profits of each type of product. The constraint function
consists of three main types, namely: raw materials, labor hours, and forecasting the demand
for the three types of products.

The following is the elaboration and equation of each variable and function of linear
programming.

Decision Variable:

X1 = School Shoes

X2 = Sports Shoes

X3 = Formal Work Shoes

The objective function is to maximize profits:

Profit = 82,625 X1 + 91,590 X2 + 56,824 X3

Function constraints that hinder production:

Raw Materials: 0.49 X1 + 0.27 X2 + 0.65 X3 ≤ 875 Workers: 0.78 X1 + 0.63 X2 + 0.45 X3 ≤
4,368 Forecasting Requests for School Shoes: X1 ≤ 230 Forecasting Demand for Sports
Shoes: X2 ≤ 344 Forecasting Request for Formal Work Shoes: X3 ≤ 450

The program used to find out the combination of products in getting the maximum profit is
Quantitative Management (QM) for Windows Version 2.2. The following is the analysis
process using QM for Windows:
Picture 1 Input Data – Linear Programming

Picture 2 Linear Programming Result – Linear Programming

The results obtained from the discussion of the principle is the company must produce as
many as 230 pairs of school shoes to benefit from school shoes as much as Rp. 19,003,750,
producing sports shoes as many as 344 pairs of shoes to benefit from sports shoes of Rp.
31,506,960, formal work shoes totaling 450 pairs of shoes to benefit from formal work shoes
amounting to Rp. 25707800. The maximum total profit obtained if producing 230 pairs of
school shoes, 344 pairs of sports shoes, 450 pairs of formal work shoes is Rp.76,081,510.

Conclusion

Based on the discussion, some conclusions in the study include the following. The linear
equation of the objective function and the linear equation of the five constraint functions, as
well as the elaboration of the three main constraints are as follows. First, the objective
function, profit = 82.625 X1 + 91.590 X2 + 56.824X3. Second, the constraint function, raw
materials: 0.49 X1 + 0.27 X2 + 0.65 X3 ≤ 875; labor force: 0.78 X1 + 0.63 X2 + 0.45 X3 ≤
4.368; forecasting for school shoes: X1 ≤ 230; demand for sports shoes forecasting: X2 ≤
344; Forecasting demand for formal work shoes: X3 ≤ 450. Third, the elaboration of the
constraint function is (i) the use of synthetic leather is not optimal because the synthetic
leather used is 498.08 m2, while the available raw materials are 875 m2; unused synthetic
leather 376.92 m2; (ii) the use of labor hours is not optimal because the workforce needed is
598.62 work hours while the available work hours are 4368 work hours; unused work hours
are 3769.38 hours; (iii) the amount of each product that must be produced in accordance with
the amount of production forecasting for the next period (production target). A number of
point 2 product conclusions can be produced according to the availability of raw materials
and labor hours owned by the company.

The company must produce 230 pairs of school shoes to get the benefit of Rp. 19,003,750,
producing as many as 344 pairs of sports shoes to benefit from sports shoes of Rp.
31,506,960, formal work shoes totaling 450 pairs to benefit from formal work shoes totaling
Rp. 25707800. The maximum total profit obtained if producing 230 pairs of school shoes,
344 pairs of sports shoes, 450 pairs of formal work shoes is Rp.76,081,510.