INDICATING MATERIAL UTILIZATION IMPROVEMENT POTENTIAL IN LEATHER GOODS PRODUCTION THROUGH MIXED INTEGER LINEAR PROGRAMMING:

Abstract

Among various inputs of leather articles production, leather is the major material dictating productivity and profitability of the company. So it should be utilized as efficiently as possible. The utilization level of leather material is determined by the operations carried out in cutting workstation of the production line. The goal of this study was to improve material utilization in leather goods production through optimization methods in Abrish leather articles manufacturing enterprise of Hawassa town. The current production system of the company was investigated through objective observation and interview tools applying work study techniques. The major product items were identified and their respective flow of production was analyzed to identify the causes of material wastage and also looking for opportunity doors to act improvements so as to achieve optimal material utilization. The identified major products of the company were categorized in two classes for grouped planning and production of items with respect to their component sizes and geometric shape for economic interlocking in cutting for minimal wastage. After categorization of products, a mixed integer linear programming model was formulated for determining the optimal number of products in each group for the realization of the maximum possible profit, considering tangible constraints of the business environment. The proposed system was analyzed to have 84.3% reduction potential of scrap generation and the achievable weekly profitability level had been calculated with the formulated model using POM-QM software. Proper implementation of the proposed system enables the company to make an estimated profit of 56,190.63 ETB per week or 2,921,912.76 ETB per annum