MODEL FOR DETERMINING DISTRIBUTION CENTRE OF WATER HEATER PRODUCT (A CASE STUDY AT PT WIJAYA KARYA INDUSTRI ENERGI)

• Main Author: Bagus Putu Somantara, Ida
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/42484
• Institution: Institut Teknologi Bandung

Idea to establish a Distribution Centre (DC) as a business strategy was triggered by complains from customers received by distributors as company’s distribution network that they required a quick respon to WINNER as principle or manufacturer of water heater products, so they wouldn’t waste much time to get their orders due to long distance and late delivery time factors. This studi aims to provide information to management before making a decision to determine the right location for opening new warehouses and their coverage areas. For that purpose, we propose a two-echelon-integrated distribution network for water heater products that involve plant—warehouses--distributors. Performance criteria is minimazing total costs which consist of setting-up or opening cost of new warehouses, transportation cost from plant to warehouse and from warehouse to distributors. Whereas the contrains in this model are plant capacity, warehouse capacity, and load capacity of transportation vehicles. Model developed for solving the above problem was linear programing since process computation would be much faster compare to non-linear model. Numerical test was also performed to assure the model suited to model logic and to obtain optimum solution before processing with real data. After processing actual data using LINGO 11.0 software, we obtained global optimum solution by opening 3 warehouses located at Jakarta, Serang and Bandung City. Jakarta warehouse serves 9 cities, Serang warehouse supplies 9 cities and Cirebon covers the remaining 5 cities.