Optimizing Strategy To Leverage Profit Of A Home Industry

Abstract

Micro small and medium enterprise (SME) is a business type with a small to medium amount of capital and fast cash turnover because most of the businesses are generally retailing. As a retail, the selling price and quality of their products are competing with each other. Therefore, a proper strategy is needed in order to leverage their profits. One of the strategies is through optimizing the production process. This case study was conducted in a garment industry in Indonesia producing a variety of clothes. Through a linear programming and sensitivity analysis, the most optimum process was found. By applying the suggested process, the company is projected to be able to increase its profits from 24% to 33%. This study significantly contributes to the micro SMEs, especially the garment industry in planning proper strategies in order to increase its profits.