THE DEVELOPMENT OF DISTRIBUTION CENTER LOCATION SELECTION MODEL AND INVENTORY DECISIONS ON THE SUPPLY CHAIN SYSTEM OF TWO-ECHELON MAIN DISTRIBUTION MATERIAL (MDU) IN THE SUPPLY CHAIN MANAGEMENT (SCM) DIVISION PT PLN (PERSERO)

• Main Author: Herlina, Chaty
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/50865
• Institution: Institut Teknologi Bandung

Material Distribusi Utama (MDU) are the main materials needed in PLN's operational activities on the distribution network (JTM, JTR and SR) to distribute electricity from the PLN Network to customers. Material Distribusi Utama (MDU) is a critical material in operational activities for PLN Area throughout Indonesia. There are several problems regarding the distribution of MDU. First of all, MDU’s are delivered directly from manufacturer to 149 PLN Area’s warehouse, which cause the increasing of delivery frequency with an unoptimal order quantity. Moreover, direct delivery model generates longer lead time that drives PLN Area to stock more MDU to anticipate uncertainty of demand. All of these give raise to logistic and inventory costs. Logistics problems at PLN can be concluded as MANY-TO MANY logistical problems. Based on those problems, this research will develop a model for selecting the location of the distribution center and the distribution network of the MDU using the transshipment model approach. The model developed in this study refers to Javid and Azad's (2010) incorporating location-routing-inventory model. The transshipment reference model used in solving distribution problems is the Lin and Liu model (2007). In this study there is an addition of the concept of multi echelon stock. The scope of the problem in this study is the distribution of two echelon models with multi-sources that involves three entities in the system; multi Suppliers, multi Distribution Centers, and multi PLN Areas. The developed model provides a solution in the form of the location of the Distribution Center, the involved distribution network of each echelon, and the determination of inventory policies in the form of Economic Order Quantity (EOQ), Safety Stock and Reorder-points. This research results in a non-linear integer programma mix (MINLP) model that has considered inventory integration between echelons in a multi-source distribution network. From the results of data processing performed using LINGO 18.0 software, the best solution is to open 2 (two) Distribution Centers to serve 7 (seven) PLN Areas. This change in distribution network can reduce total distribution costs by 38% of the total logistics costs of the direct distribution model.