- Trade-off: Sisil, farhan

- Trade-off Theory and Real Case (Sisil)

- The item is imported meat. That product day to day basis not much. There’s time
product for that product increase more than their production. Cannot replenish their
inventory because related with supplier and imported. There is lost sales
- Even if use secondary supplier, will increase the price, increase the inventory cost and
lower the profit margin
- Goods such as milk and vegetables (lettuce), many suppliers that provide it
- Stock out impact of that replenish less than not replenish good
- According to the forecast, lettuce is sold, but become waste inventory. Trade-off,
because has purpose to increase the capacity but resulted in holding cost and waste
cost

Solution (Farhan)
- Forecast demand more specific since it affects the amount of products that they will
be stocked. The data is everything, to make data accurate as possible with affect their
safety stock (1.5 daripada yang dibutuhkan)
- Propose structurize method / system for forecasting demand
- That’s okay to get small profit margin, because that promo has positive impact.
Prioritize profit margin than opportunity for getting new customers

- Chase Strategy: Sonny, Rima

Chase strategy is a method used based on the number of demand and the number of
workers allocation adjusted to the number of demand. Chase Strategy aims to adjust
existing demand with one reason so that all requests from consumers can be fulfilled →
maintain the trust of its customers.

Characteristics of Chase Strategy :

● Matching the level of production with the level of demand.
● Add or reduce labor according to the level of demand.
● Used to determine the number of permanent workers, but the working hours are not
fixed.
● Chase strategy is most appropriate when holding costs are high and cost of changing
capacity are low.

+ Labor utilization is high

- Short term notice affecting any potential damage to the employee morale

In the case of Cafe Brick, the production can be divided into two groups: the first one is
kitchen and bar, and the second one is roastery.

Kitchen and Bar

In the case of cafe brick, Chase Strategy can be suitable for determining the number of
workers allocated for every shift based on the forecasted demand. Rather than only
using the number of worker that remains constant throughout three shift and adding
more workers with an overtime if its needed which may incurred any additional cost →
we provide a solution : Cafe Brick may increasing or decreasing the number of worker
based on the forecasted demand. However, it is very hard to vary the production capacity
of worker in the kitchen and bar division, as in practice, it is difficult to vary the number
of worker on short notice without negatively affecting the worker morale. so our
prefered solution is by making a plan of weekly number of resource needed in advance
to suit the fluctuation in demand and includes some back-up resources in the planning
during the peak season.

Roastery
On the other hand, the production of roasted coffee beans will depend on the anticipated
demand. The roastery produces a specific number of coffee bean or a “target” per production
rather than working per shift. Hence it can increase or lower the production of coffee with
relative ease according to the anticipated demand. It complies with the chase strategy as it can
change the capacity of production simply by adding or subtracting the number of bean
to roast. Moreover when demand is low or when the roastery has completed its target, the
operator of the roastery is reallocated to the bar division without any cos. At Cafe Brick the
coffee can be stored for up to two weeks, while other item are sold within a few days. The
roastery is suitable for chase strategy as it has a high holding cost of coffee, and low cost of
capacity changing.

Suggestion
→ We believe that in the case of Cafe Brick, chase strategy will be more effective when
used for production that uses primarily variable cost, such as adjusting the number of
bean to the roastery or by hiring a part-time worker whose working hour is more
flexible to suit the fluctuation in demand, so that the cost allocated to pay the worker can
be match to the output of production.

- Time Flexibility: Clément

The workforce is still the same but the numbers of hours varied to synchronise production
and demand. Time flexibility should be used when inventory holding costs are high and
capacity is relatively inexpensive. Time flexibility can be used if there is a dysfunction of the
machine capacity.
There are many solutions that companies can explore in order to create more flexible work.
Depending on the type of position and responsibilities, there is a flexible strategy that will fit
nearly every employee’s needs.

Analyzing of Time Flexibility :

Cafe Brick used Time Flexibility because even if they have 3 shifts of 8 hours each of the
employee can choose which day they want to work. The only obligation is to complete 48
working hours per week.

Suggestion:
-> We believe that in the case of Cafe Brick they could maybe use a better method of hours
per week and for example propose more choice about the obligation hours to complete.
- Level Strategy: Helen, Hortense

Theory of level strategy:

Level strategy is about using is using the inventory as the key for planning and anticipating in
the company. It’s shortage and surplus that will influence inventory, because capacity and
workforce are stable. Production and deland are not synchronized in the case.

Two ways:
● Inventory conduct in anticipation of future demand
● Backlogs are conduct from high to low demand period

A potential issue to avoid is a large inventory that might accumulate and customers order
might suffer from this and be delayed, and that what we want to avoid.
To optimize the level theory strategy, is it’s better when the inventory holding and blacklog
cost are low.

Analyzing of Level Strategy :

Cafe Brick used leveling strategy for Roastery that production house is placed on the
side of the cafe. As the coffee production, Cafe Brick have its own Coffee brand named
KOPIRAKJAT.
For the production itself, Cafe Brick produces first so it is not based on the demand of
customers. The results of coffee productions are 2 : cans packaging (120 gram) and bag
packaging (100 gram). Both of them have 2 flavors, original and 2 in 1 (mixed with
traditional sugar / gula aren )
For 1 times production, it used 2500 gram of raw coffee beans. After steps of
production, the raw materials reduce by 30% so the total of coffee powder that ready to be
packs is 1750 gram, approximately for 14 cans and 17 bags.
Raw materials for producing coffee powder is imported from supplier in Jogja.
Because price of packaging and price of airplane is too high.
Problems points : Demand fluctuation and expired of products