EXPECTED PROFIT OPTIMIZATION OF AMMONIUM NITRATE USING THE NEWSVENDOR MODEL

• Main Author: REINALDO (NIM : 29108056); Pembimbing : Dr. Mursyid Hasan Basri, HENDY
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/15905
• Institution: Institut Teknologi Bandung

PT PINDAD is a Government's company that is operated in military and commercial industries, and consist of many divisions. One of which is HANDAKKOM, which is working on commercial explosive division. HANDAKKOM is categorized as a new division, which business prosess in <br /> <br /> <br /> explosive distribution. Because of that, the distribution line and the operation systems are not optimally working yet. At this time, HANDAKKOM is having issue in occurring lost sales. Based on the result of further evaluation and observation, it is found that <br /> <br /> <br /> the root cause for HANDAKKOM's lost sales issue is because of the model used is not precise, which is fixed amount, fixed period method. This method only give <br /> <br /> <br /> the same order quantity, which is far below the actual demand in every selling period. The problem solution that is suggested is using The Newsvendor Model, because of the business model of HANDAKKOM has similar characteristic with the model's assumption. In this method, the proposed solution is determination of the order quantity of explosive product (focused on ammonium nitrate), for every selling period After further analysis using the method, the optimal order quantity that is suggested for ammonium nitrate is 12.739.748 Kg for every selling period. By using The Newvendor Model, Betting on The Uncertained Demand, it is projected <br /> <br /> <br /> that the HANDAKKOM will get the expected profit up to 196% of the initial profi.