Cost Optimization in Disruption Conditions: A Case Study in Small Medium Enterprise
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Autores: Mulya Adi Kredo Tengtarto
, Moses Laksono Singgih, Nurhadi Siswanto
- Localización: International Journal of Professional Business Review: Int. J. Prof.Bus. Rev., ISSN 2525-3654, ISSN-e 2525-3654, Vol. 8, Nº. 5, 2023 (Ejemplar dedicado a: Continuous publication; e01897)
- Idioma: inglés
- Enlaces
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Resumen
Purpose: The objective of this study was to design a cost optimization model that offers production improvement for SMEs.
Theoretical framework: Several studies related to production system disruption management have been conducted, with the majority focusing on large companies. However, small and medium enterprises (SMEs) have limitations compared to large companies. Repairability is considered for cost optimization.
Design/methodology/approach: This research designed a cost optimization model that offers production improvement with repairability process for SME.
Findings: There is a need for repairability given the disruption caused by defective products in SMEs. There is a clear difference in total profit between the current state without repairability and proposed conditions with repairability. SMEs suffer massive losses in the absence of repairs, assuming they do not consider repairing defective products with a production defect rate of approximately 15%. The current state produces many downgraded products. However, repairability still needs to be improved to increase profits.
Research, Practical & Social implications: The study implied that there is a need to consider repairability for product defects at SMEs, especially those with a 15% product defect rate. The use of the proposed model optimizes profit and is designed to increase production capacity based on product improvements. Repairability was considered in this research, considering that SMEs are more susceptible to disruptions compared to large companies.
Originality/value: The novelty of this paper is adding process repairability to the cost optimization model for SMEs in the textile sector, then considering the product downgrade under the conditions in SMEs.
